Shares of tyre companies, Apollo Tyres Ltd, and JK Tyre & Industries Ltd hit a new 52-week high on Monday, on the back of National Company Law Appellate Tribunal (NCLAT) New Delhi's order to Competition Commission of India (CCI) to review cartelisation order.
"NCLAT through its judgement has disposed off the appeals by remanding back the case to CCI for review," Apollo Tyres said in an exchange filing on Saturday.
With reference to an filing by the company in February, CCI issued an order concerning anti-competitive practices by a few tyre manufacturing companies, including Apollo Tyres Ltd.
The company said that it had filed an appeal against the aforesaid order before the NCLAT.
Further, the appellate tribunal also asked CCI to review the hefty fines totally 1,788 crore rupees imposed by it to save the domestic tyre industry.
Fines on the tyre manufacturers was issued by CCI on August 31, 2018. But it wasn't until February 2022, following the Supreme Court's final approval, that the order was delivered to them.
The Madras High Court denied an appeal that was submitted shortly after the CCI issued the order in 2018 on January 6, 2022. Further arguments were made against this before the Supreme Court, which on January 28, 2022, likewise rejected a plea.
The tyre companies subsequently contacted the NCLAT after receiving the order from the CCI almost four years later
According to PTI, CCI had imposed penalties of 425.53 crore rupees on Apollo Tyres, 622.09 crore rupees on MRF, 252.16 crore rupees on CEAT, 309.95 crore rupees on JK Tyre, and 178.33 crore rupees on Birla Tyres.
"This is a relief for tyre companies, which had been accused and fined for controlling pricing against customer interests in the replacement market for a certain period of time. We expect tyre stocks to react positively to this development with prominent names in our coverage being Apollo Tyres and JK Tyres," said brokerage ICICI Direct Research in a report.
On the technical front, Apollo Tyres has gained 92.16% from 52-week low of 165.2 made on March 7, and JK Tyre & Industries gained 113.83% from 52-week low of 95.4 made on June 17.
Furthermore, JK Tyre continued to set new records today and surpassed its levels from Friday, while Apollo Tyres exceeded its previous record set on December 1.
According to analysts, Apollo Tyres is an uptrend, and any dips should be taken as a buying opportunity. 300-305 level is the support zone for the stock, and 345-335 level is the resistance level.
Similarly, analysts believe JK Tyre too to be in an uptrend with strong support seen at 193 level, and 234 is the resistance level.