Within auto ancillary space tyre companies look the best: Ventura Securities Ltd

How is the outlook for tyre space considering rubber prices have seen a bit of an uptick this time?

We do track the space and we are bullish on this. A tyre sector especially and the auto ancillary space for the simple reason that if you look at the last six years data, for the first time we are just bigger than the OEM markets.

OEM markets typically operate on 4.5%-5% margin whereas replacement market goes about 20% to 25%. Coupled that with the fact that the carbon black industry also is going looking up, rubbers prices have been stable and tyre manufactures are getting slight premium so for as price is concerned.

So far as the replaced market is concerned, I think this cycle will continue for the next minimum 8 to 10 quarters. So overall, within auto ancillary space tyre companies look the best.