3 Strong Undervalued Tyre Stocks in India to Watch in August 2026
- August 25, 2026
- Posted by: Kunal Singla
- Category: Market
3 strong undervalued tyre stocks in India: Apollo Tyres at PE 16.57, JK Tyre at PE 16.80, MRF at PE 23.55. Tyre sector PE is 21.20.
Quick Answer
Three strong undervalued tyre stocks in India stand out right now: Apollo Tyres, JK Tyre and Industries, and MRF. The tyre sector PE stands at 21.20, and Apollo Tyres and JK Tyre both trade well below this at PEs of 16.57 and 16.80 respectively. MRF, while trading at a slight premium to the sector at PE 23.55, remains well below historical market multiples for India’s most recognised tyre brand. All three names benefit from rising vehicle sales across passenger cars, commercial vehicles, and two-wheelers.
India’s tyre sector has benefited from strong domestic vehicle sales growth across all categories, alongside a growing replacement tyre market as India’s vehicle fleet expands. The sector has moderate capital intensity, with raw material costs, particularly natural rubber and crude-linked synthetic rubber, being the primary margin lever.
Apollo Tyres, JK Tyre, and MRF are the three names that stand out for investors looking at undervalued tyre stocks in India. This article breaks down the numbers behind each undervalued tyre stock and the vehicle demand story supporting their case.
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What Makes a Tyre Stock Strong and Undervalued?
A tyre stock qualifies as strong and undervalued when it trades at or below the sector PE while maintaining healthy return on equity and manageable debt in a business driven by India’s vehicle fleet growth. The tyre industry benefits from a dual revenue stream: original equipment sales to vehicle manufacturers and a larger, higher-margin replacement market that grows as the installed vehicle fleet expands.
The tyre sector in India carries an industry PE of 21.20. Companies trading at or below that level, while maintaining ROE above 11% and reasonable leverage, stand out as undervalued tyre stocks in India worth examining.
3 Strong Undervalued Tyre Stocks in India: At a Glance
| Company | CMP (Rs) | PE Ratio | Sector PE | Dividend Yield | ROE | Market Cap (Cr) |
|---|---|---|---|---|---|---|
| Apollo Tyres | 442.40 | 16.57 | 21.20 | 1.35% | 12.39% | 28,313 |
| JK Tyre | 381.00 | 16.80 | 21.20 | 1.05% | 14.59% | 11,031 |
| MRF | 1,34,150.00 | 23.55 | 21.20 | 0.17% | 11.57% | 56,949 |
1. Apollo Tyres: Steepest Discount, Pan-India and European Presence
Apollo Tyres is the most undervalued of the three tyre stocks on this list within the sector PE framework, trading at a PE of 16.57 against the tyre sector PE of 21.20, a discount of roughly 22%. As one of India’s largest tyre manufacturers with a significant presence in Europe through its Vredestein brand, Apollo Tyres benefits from diversified geographic exposure that most domestic tyre companies do not have.
The company posts a return on equity of 12.39% and an EPS of Rs 26.90, with a price-to-book ratio of 1.68. At a current price of Rs 442.40, the stock has pulled back from its 52-week high of Rs 540.50, creating a better entry opportunity than earlier in the year even as vehicle demand continues to support tyre volumes.
Apollo Tyres’ dividend yield of 1.35% reflects consistent shareholder returns. Debt-to-equity of 0.22 is moderate and well-managed for a capital-intensive tyre manufacturer with expansion programmes underway. For investors comparing undervalued tyre stocks in India, Apollo Tyres’ dual India-Europe exposure at a meaningful sector discount stands out.
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2. JK Tyre: Highest ROE of the Three, Strong Commercial Vehicle Presence
JK Tyre and Industries stands out among undervalued tyre stocks in India for combining the highest return on equity of the group, at 14.59%, with a PE of 16.80, a discount of roughly 21% to the tyre sector PE of 21.20. As a major supplier of tyres for commercial vehicles, passenger cars, and two-wheelers, JK Tyre has significant exposure to India’s commercial vehicle fleet, which benefits directly from the country’s infrastructure and logistics growth.
The company’s EPS of Rs 22.78 on a current price of Rs 381.00 gives a price-to-book ratio of 1.82. JK Tyre’s ROE of 14.59% is the highest among the three names here, reflecting better capital efficiency than both Apollo Tyres and MRF despite the company’s smaller scale.
The stock’s 52-week range of Rs 318.05 to Rs 611.90 shows the stock has pulled back significantly from highs, even as JK Tyre’s commercial vehicle tyre business has continued to benefit from road freight growth. Debt-to-equity of 0.81 is the highest of the three names here, typical for a company that has expanded capacity through debt funding. Among undervalued tyre stocks, JK Tyre’s highest ROE and commercial vehicle focus make it worth tracking.
3. MRF: India’s Most Recognised Tyre Brand, Approaching Sector PE
MRF completes this list of undervalued tyre stocks in India at a PE of 23.55, marginally above the tyre sector PE of 21.20 but included here as the sector’s iconic name and the most recognised tyre brand in India. As the country’s largest tyre company by market capitalisation, with India’s highest single-share price reflecting its never-split equity structure, MRF commands premium brand recognition across all vehicle categories.
The company’s EPS of Rs 5,700.92 on a current price of Rs 1,34,150.00 gives a price-to-book ratio of 2.72. MRF’s ROE of 11.57% is the lowest of the three names here, reflecting the company’s conservative financial management rather than any fundamental weakness. Debt-to-equity of just 0.15 reflects MRF’s exceptionally conservative balance sheet management.
The 52-week range of Rs 1,22,000 to Rs 1,63,600 shows MRF trading in the lower half of its range. For investors seeking the broadest brand premium within India’s tyre sector at valuations that are reasonable by historical MRF standards, this name rounds out the undervalued tyre stocks list despite its slight premium to the sector average.
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Why Are These Tyre Stocks Still Undervalued or Fairly Valued?
The relatively conservative valuations across established undervalued tyre stocks in India reflect the sector’s raw material cost exposure, particularly to natural rubber and crude oil-linked synthetic rubber prices, which can create margin volatility that the market prices cautiously. Apollo Tyres’ European business also carries currency risk that domestic-only tyre companies do not face, which contributes to its sector discount.
JK Tyre’s relatively higher leverage compared to peers creates some investor caution, while MRF’s traditionally conservative management style keeps reinvestment and topline growth more measured than faster-growing peers.
Key Risks to Keep in Mind
Raw material cost cycles, particularly natural rubber and crude oil, directly affect tyre sector margins and can compress profitability unpredictably between pricing revisions. Growing EV adoption could gradually shift tyre performance requirements, requiring ongoing R&D investment. Apollo Tyres’ European operations carry forex risk alongside the opportunity of geographic diversification.
Conclusion
Among undervalued tyre stocks in India, Apollo Tyres, JK Tyre, and MRF stand out for trading at or near their sector PE while benefiting from India’s growing vehicle fleet. Apollo Tyres offers the steepest discount with pan-India and European exposure. JK Tyre provides the highest ROE with a commercial vehicle focus. MRF brings unmatched brand equity in the Indian tyre market. As with any equity investment, past performance does not guarantee future returns, and investors should do their own research or consult a SEBI-registered advisor before making any decisions.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
FAQs
Which are the best undervalued tyre stocks in India right now?
Ans. Apollo Tyres (PE 16.57), JK Tyre (PE 16.80), and MRF (PE 23.55) are among the most notable tyre stocks in India as of August 2026 on a valuation basis, with Apollo Tyres and JK Tyre trading well below the sector PE of 21.20.
Is Apollo Tyres a strong undervalued stock?
Ans. Apollo Tyres trades at a PE of 16.57 against the tyre sector PE of 21.20, with an ROE of 12.39% and exposure across India and Europe through its Vredestein brand. Among undervalued tyre stocks in India, it offers the steepest sector discount.
Why is JK Tyre considered undervalued?
Ans. JK Tyre trades at a PE of 16.80 compared to the sector PE of 21.20, with the highest ROE of the group at 14.59%. As a major commercial vehicle tyre supplier, it stands out among undervalued tyre stocks in India for its capital efficiency.
What is MRF’s current dividend yield?
Ans. MRF’s dividend yield is approximately 0.17% at the current market price of Rs 1,34,150, reflecting the company’s preference for retaining earnings rather than distributing cash, consistent with its conservative long-term management approach.
Are tyre stocks a good long-term investment in India?
Ans. India’s tyre sector benefits from a growing vehicle fleet, rising replacement tyre demand, and infrastructure-led commercial vehicle growth. Undervalued tyre stocks in India like Apollo Tyres and JK Tyre offer exposure to this growth at below-sector valuations, though raw material cost cycles remain a key factor to monitor. Past returns do not guarantee future performance.
What is the tyre sector PE in India in 2026?
Ans. The tyre sector industry PE in India stands at 21.20 as of August 2026. Apollo Tyres and JK Tyre both trade at PEs of around 16-17, meaningfully below this benchmark, making them among the more attractively valued undervalued tyre stocks in India.
Should I buy Apollo Tyres shares in 2026?
Ans. Apollo Tyres is among the most broadly diversified undervalued tyre stocks in India, trading at PE 16.57 with exposure to both domestic and European markets and a 12.39% ROE. Whether to buy depends on your individual financial goals, risk tolerance, and investment horizon. Consult a SEBI-registered advisor before investing.
