5 Undervalued Tyre Stocks to Watch Out for in 2025

The Indian tyre industry stands at a crossroad. This sector is deeply rooted in traditional manufacturing but is evolving rapidly with the growth of electric mobility, sustainable materials, and new export opportunities.

This brings us to the topic of this editorial: undervalued tyre stocks.

Often overshadowed by headline-grabbing bluechips, these lesser-known or underappreciated companies offer investors a unique combination of steady fundamentals and attractive valuations.

Whether it's due to cyclical headwinds, muted investor sentiment, or simply being overlooked by the broader market, these 5 tyre stocks are trading at decent valuations.

Have a look...

#1 JK Tyre & Industries

JK Tyre & Industries is a leading Indian tyre manufacturer with a strong global footprint. It's the flagship company of the JK group and has its headquarters in New Delhi. The company has manufacturing facilities in India and Mexico and exports to numerous countries worldwide.

The company is a market leader in the truck and bus tyre segment. It offers a wide range of tyres for passenger cars, commercial vehicles, two and three-wheelers, off-road vehicles, and motorsports.

JK has been steadily gaining traction with revenue growing at a healthy 18.1% CAGR over the last three years, and profits accelerating even faster at 34.5%.

As the automotive sector rebounded post-COVID, demand for tyres particularly in the commercial vehicle and replacement segments-picked up significantly. JK Tyre, with its strong presence in the truck and bus radial (TBR) category, was well-positioned to capture this upswing.

The company also benefited from a conscious shift toward a more premium and profitable product mix, focusing on high-margin radial and specialty tyres.

Its international operations, particularly through its Mexican subsidiary Tornel, contributed to a rise in exports, adding stability to revenue streams.

In FY24, JK reported a Return on Equity (ROE) of 18.1% and a Return on Capital Employed (ROCE) of 24.8%.

In January 2025, it partnered with the International Finance Corporation (IFC), through which JK Tyre secured a US$ 100 million (m) sustainability-linked loan.

Going forward, the company's future plans for 2030 focus on sustainability, technological innovation, and global expansion. JK Tyre aims to reduce carbon intensity by 50% by 2030 and is investing in developing eco-friendly and smart tyre technologies, including those for electric vehicles (EV).

They also plan to expand their distribution network and geographical footprint, particularly in key markets like Australia, Europe, and South Africa.

For more details, check out JK TYRE & IND company fact sheet.

#2 Apollo Tyres

Apollo Tyres is a leading Indian multinational tyre manufacturer headquartered in Gurugram, Haryana. Founded in the early 1970s, it has grown into a global brand with manufacturing units in India and Europe.

The company operates under two key brands Apollo and Vredestein and offers a wide range of tyres for passenger cars, commercial vehicles, two-wheelers, off-road equipment, and more.

Apollo Tyres has been on a roll with a 13.4% revenue CAGR and a 70% profit CAGR.

Apollo Tyres has strategically focused on premium product segments, such as high-margin radial tyres for both passenger vehicles and trucks, which has boosted profitability.

Cost efficiency improvements through optimised plant utilisation and better supply chain management have allowed Apollo to enhance its margins. Favourable trends in raw material costs, particularly softer rubber prices, have also kept input costs in check.

Expansion into Europe, has also contributed to revenue growth, while the robust demand in the domestic replacement tyre market has supported its strong financial performance.

Lastly, Apollo's push to strengthen its retail presence, via initiatives like Apollo Zone and online sales platforms, has increased customer reach and pricing power.

In FY24, the company reported a ROE of 12.4% and a ROCE at 18.5%.

In 2025, Apollo Tyres has been actively engaged in several collaborations and initiatives, including sports partnerships, sustainability projects, and research collaborations.

Some key examples include a partnership with Manchester United, a campaign highlighting the power of SUVs featuring Sachin Tendulkar, and a sustainable material partnership with Tyromer Inc.

The company is developing new tires for EVs and has partnered with NATRAX to develop a unique cut and chip test track.

Going forward, the company plans include expanding market share, increasing sustainable materials usage, and investing in digitalisation.

For more details, check out APOLLO TYRES company fact sheet.

#3 CEAT

CEAT is a leading Indian tyre manufacturer and part of the RPG Group. Known for its wide range of tyres for two-wheelers, cars, commercial and agricultural vehicles, it has a strong presence both in India and overseas.

In the last 3 years, revenue has grown at a 16.2% CAGR, while profits have grown at a 13.7% CAGR.

The company has shifted its focus toward high-margin radial tyres, especially in the passenger vehicle and SUV segments, which helped improve its product mix and profitability.

It also expanded manufacturing capacity through new and upgraded plants, allowing it to meet rising demand both in domestic and international markets.

CEAT strengthened its partnerships with major automobile manufacturers (OEMs) and capitalised on the post-pandemic recovery in the replacement tyre market, where demand surged as more consumers replaced worn-out tyres.

Additionally, the company made strong inroads into export markets, particularly in Europe and Southeast Asia, which further boosted revenue.

In FY24, the company reported a ROE of 15.7% and RoCE of 22.5%.

In December 2024, CEAT entered into a definitive agreement to acquire Michelin's Camso brand's off-highway tyres (OHT) and tracks business for US$ 225m.

Going forward, the company's OHT division, CEAT Specialty, is targeting a 70:30 export-to-domestic revenue split, expanding its presence in over 100 countries. This move is bolstered by the acquisition of the Camso brand, enhancing CEAT's footprint in North America and the European Union.

At its Chennai facility, the company has invested in Industry 4.0 technologies, resulting in a 25% reduction in factory costs and improved equipment efficiency.

For FY26, the company has earmarked Rs 9-10 billion(bn) in capital expenditure, primarily for expanding passenger car tyre and TBR tyre capacities.

For more details, check out CEAT company fact sheet.

#4 MRF

MRF Ltd is India's largest tyre manufacturer and a globally recognised brand in the automotive industry. Headquartered in Chennai, the company has a rich history of innovation, quality, and market leadership.

Over the past three years, MRF has demonstrated impressive momentum, achieving a 15.9% CAGR in revenue and a 17.7% CAGR in profit.

MRF has improved its operational efficiency, which led to an expansion in profit margins. This was supported by effective cost management and a correction in key raw material prices, such as rubber, which helped reduce input costs.

At the same time, the company saw broad-based demand across segments, particularly in the replacement market, as well as steady exports, which added to geographic diversification.

Strategic pricing initiatives enabled the company to pass on costs to consumers without compromising market share, while its brand equity and product reliability helped retain demand.

In FY24, MRF had reported ROE of 12.5% and RoCE of 18.1%.

The company's recent collaboration involves naming Indian cricketer Shubman Gill as their new brand ambassador, joining Virat Kohli. This partnership extends across all future cricket tournaments and was formally announced in March 2025.

Going forward, MRF's plans revolve around strategic growth and enhanced operational efficiency. The company is focused on expanding its global presence, strengthening its position in the global tyre market, and leveraging technology to improve productivity and cost control.

For more details, check out MRF company fact sheet.

#5 Apcotex Industries

Apcotex Industries is a prominent Indian specialty chemicals company, established in 1986 and headquartered in Navi Mumbai.

The company specialises in manufacturing synthetic rubber and latex products, serving diverse industries such as automotive, textiles, paper, construction, and adhesives.

Apcotex has shown steady growth, recording a 3-year CAGR of 27.7% in revenue and 6.9% in profit.

Apcotex has a diversified product portfolio, including synthetic rubber and latex products. This has allowed it to serve multiple industries such as automotive, textiles, construction, and adhesives, ensuring a steady demand for its offerings.

In FY24, the company reported a ROE of 10.3% and a RoCE of 14.6%.

In March 2025, Apcotex announced the acquisition of a 26% equity stake in Opera Vayu Narmada Private Limited, a renewable energy firm, for Rs 33.8m.

Going forward, the company plans to focus on expanding its global presence, particularly in Asia, while also strengthening its R&D capabilities and expanding its product portfolio with a focus on sustainable and environmentally friendly products.

For more details, check out APCOTEX INDUSTRIES company fact sheet.

Snapshot of Top Undervalued Tyre Stocks on Equitymaster's Stock Screener

Conclusion

Investing in undervalued tyre stocks isn't just about spotting low PE ratios or price to book multiples. it's about understanding the economic cycle, and where these companies are headed.

The tyre industry, by nature, is cyclical sensitive to raw material prices, infrastructure spending, replacement demand, and automotive sales. This means that periods of underperformance can often precede significant re-ratings when macro conditions begin to favour the sector.

Today, many of these undervalued tyre companies are operating at an inflection point. With softening input costs, improved operating leverage, rising export potential, and technological innovation they are positioned not just to survive, but to thrive.

Yet, the broader market may still be pricing them based on yesterday's narratives of inflation worries, sluggish auto sales, or muted rural demand.

For the discerning investor, this disconnect creates a window of opportunity But as with any value strategy, patience is key.

To make informed decisions, it's crucial to assess a company's fundamentals, corporate governance, and long-term prospects, rather than relying solely on market sentiment.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...