Neeraj Deewan of Quantum Securities told CNBC-TV18, "We were getting concerned about valuation in tyre stocks because they had moved up a lot. We were anyways concerned about rubber prices which may impact their profitability going ahead."
"I think with the news coming in today that also reaffirms that view. We track stocks like Apollo Tyres, trading 6.4-6.5 EV EBITDA on FY19 basis. JK Tyre is 5.5 times EV EBITDA FY19. So, we are not comfortable at these valuations. I think it is a good time to book profits in tyre stocks. They have given a very good return in the last two years. So, one should just wait for a correction to buy them back," he added.
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