Tyre Stocks Plunge 8% Amid Soaring Crude, Rubber Prices; Profitability Worries Mount

• Shares of major tyre manufacturers like JK Tyre, CEAT, Apollo Tyres, MRF, and Balkrishna Industries fell 3-8%.
• Rising crude oil and natural rubber prices, exacerbated by the West Asia conflict, push raw material costs up 15-20%.
• Crude derivatives account for 45% of the tyre industry's raw material basket; rupee depreciation inflates import costs.
• CLSA estimates a 400 basis point gross margin impact by FY27 if Brent crude stays at $80 and rubber at ₹220/kg.
• Margin pressure, coupled with new capex cycles, could strain free cash flow and valuation multiples for tyre companies.