Tyre sector revenues to grow by 7-9% in FY24

New Delhi: Ratings firm Icra on Thursday said it expects a revenue growth of 7-9 per cent for tyre industry in the current fiscal.

The rating agency pegs the domestic tyre demand growth at 6-8 per cent for FY2024, supported by stable growth in the replacement segment and sustained demand momentum in the OEM segment, Icra said in a statement. The rating agency noted that it expects the demand momentum in the OEM (Original Equipment Manufacturer) segment to continue in FY24 with an estimated growth of 8-10 per cent. Replacement demand, which forms around two-thirds of tyre demand, is likely to witness mid-single digit growth in FY2024, it added.

"ICRA projects a 7-9 per cent growth in industry revenues for FY2024 with domestic growth outpacing exports," Icra Assistant Vice President and Sector Head Nithya Debbadi said. Segment-wise, commercial vehicles shall benefit from the increasing traction in the infrastructure and construction segments, she added. Strong underlying demand and preference for personal mobility will continue to drive passenger vehicles and aid in a recovery in the two-wheeler segments, Debbadi said. "Nevertheless, tyre demand remains vulnerable to potential headwinds like adverse monsoons and its impact on rural demand, supply-related issues, general inflation, and further hardening in financing rates," she added.