Shares of Apollo Tyres were on a roll and hit a 52-week high of Rs 101.80 on Tuesday, as investors expected the Indian company will drop its $2.5-billion deal to buy the US-based Cooper Tire & Rubber Co.
Besides, the recent fall in rubber prices and improved demand from car companies have also brightened the prospects of the premium tyre maker, said analysts. Car companies have been launching new models despite slowing demand.
The stock opened at Rs 93 and closed with a gain of 8 per cent at Rs 101, with volumes increasing 2.12 times to 40.24 lakh on the BSE.
Apollo Tyres has rallied 25 per cent in the past seven trading sessions after the company said it has received a favourable judgment from the Delaware Supreme Court in its ongoing tussle with US-based Cooper Tire over their proposed $2.5-billion merger agreement.
Incidentally, the Government recently revised the customs duty structure for natural rubber. The import duty will now be 20 per cent or Rs 30 a kg, whichever is lower.
While multinational companies, such as Michelin and Bridgestone, are aggressively expanding capacity in India, dealers feel that the pricing war might not play out as most premium tyre makers are already selling at discounts to their listed prices, said Mihir Jhaveri, Religare Institutional Research.
“Chinese players are not big competitors to Indian companies, as only taxi drivers and garage operators (for parking old cars) are primary customers for imports from China,” he added.