Tyre Stocks in Focus: Government Extends Countervailing Duty (CVD)

On March 12, 2024, tyre stocks such as Apollo Tyres Ltd, MRF Ltd, and JK Tyres Ltd will be in focus as the Government of India extended countervailing duty (CVD) on new, unused pneumatic radial tyres originating in China. This applies to tyres with a rim diameter exceeding 16 inches used on buses and trucks.

This will be in effect until July 23, 2024, unless changed earlier. This duty is meant to offset any unfair advantage Chinese tyre manufacturers might have due to government subsidies. This CVD applies specifically to tyres coming from China. The government first imposed this duty in June 2019 for a period of 5 years, which means that this extension has been granted for a period of one month.

What are Countervailing Duties (CVDs)?

CVDs are additional charges levied on imported goods to offset any unfair advantage a foreign manufacturer might have due to government subsidies. In simpler terms, if a government subsidises a product’s production, making it cheaper to export, CVDs are introduced to level the playing field for domestic manufacturers.

About Apollo Tyres Ltd

The share price of Apollo Tyres opened at ₹508.65 with a day low of ₹504.70. Apollo Tyres delivered a return of 30.65% and 60.89% in the past 6 months and one year, respectively. Apollo Tyres Limited is engaged in the manufacturing of automatic bias and radial tyres, and tubes. It has plants in Kochi, Vadodara, Pune, and Chennai.

About JK Tyres Ltd

JK Tyre shares were trading at ₹461.80 and touched a day low of ₹455.15. JK Tyres posted a return of 195.51% in the past one year. JK Tyres is one of the leading tyre manufacturers in India with a wide range of products catering to diverse business segments that include Truck/Bus, LCV (Light commercial vehicles), Passenger Cars, MUV (Multi utility vehicles) and Tractors.

About MRF Tyres Ltd

The share price of MRF opened at ₹1,44,050 with a day low of ₹1,43,543.40. MRF generated a return of 68.10% in the past one year. MRF Ltd manufactures tyres for Passenger cars, Two-wheelers, Three-wheelers, Off the Road (OTRs), Trucks, Farm tractors, Light Commercial Vehicles (LCVs), Tubes & flaps, etc.

The above-mentioned share prices and returns were as of March 12, 2024, at 10:30 AM.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.