The depreciation of the rupee against the US dollar is also inflating the cost of importing natural and synthetic rubber, adding further pressure on input costs. CLSA estimates that if Brent crude remains around $80 per barrel and domestic natural rubber prices hover near ₹220 per kg over the next three to six months, Indian tyre manufacturers could face a gross margin impact of nearly 400 basis points in FY27. This estimate factors in a staggered 4% price hike in the replacement market and a full pass-through of costs in the OEM segment. The brokerage also warned that margin pressure could strain free cash flow generation, particularly as several tyre companies are either entering fresh capex cycles in FY27 or focusing on deleveraging after recent acquisitions. According to CLSA, the combination of higher input costs and ongoing investment plans could weigh on capital structures and near-term valuation multiples for tyre companies.