Buy Goodyear, Apollo Tyres, TVS Srichakra within tyre space: Mayuresh Joshi

In a chat with ET Now, Mayuresh Joshi, VP, Institution, Angel Broking, shares his views on auto ancillary space.

ET Now: Auto ancillary space, what is it that you are recommending from there, your top two ideas from that pack?

Mayuresh Joshi: At the current juncture tyre stocks is what we are preferring, the general trend that we are seeing with raw material prices going down and clearly the excess supply coming through would aid the margins of most of these companies and clearly with the kind of expansion that we are seeing in OEM sales and with the replacement sales aiding the margins even further our take is that our companies should do exceptionally well over the next three to four quarters at least.

So some companies like Goodyear, which have a focus on the tractor business. The company has shown good amount of volume growth and we are expecting the sales growth to be quite robust for Goodyear.

Similarly for a company like Apollo Tyres where we believe the South African restructuring is almost done and dusted with so that would aid margins going forward with the new capacity coming up in Hungary that would greatly aid its European business operations. Even the domestic margins would inch up slowly and steadily. So Goodyear, Apollo Tyres, TVS Srichakra they are some of our few bets that we like within the tyre space.