JK Tyre announces Q3 numbers: profit up 20 per cent

Part of JK Organisation, JK Tyres and industries (JK Tyre) announced its nine month ending quarterly result on Monday. It is a leading tyre manufacturer in India. 

Commenting on the result JK Tyre Chairman & Managing Director Raghupati Singhania said "Despite challenging times amidst dumping and slow domestic markets, JK Tyre delivered a satisfactory performance. 2016 would be a significant year for JK Tyre as we are seriously contemplating entering the high growth 2/3 wheeler segment and become a formidable player." 

On financial front, the net revenue from operations of J&K Tyre reached to Rs 1617 crores in Q3FY16 compared to Rs 1838 crores in Q3FY15, a decrease of 12 per cent YoY. The EBITDA stands at Rs 461 crores this quarter compared to Rs 427 crores in Q3FY15, an increase of 8 per cent YoY. The EBITDA margin of company stands at 28.5 per cent this quarter compared to 23.23 per cent in Q3FY15. The increase in EBITDA is attributed to decrease in consumption of raw material by 16.86 per cent to Rs 883 crores compared to Rs 1062 crores for the same period last year. The net profit stands at Rs 111 crores in Q3FY16 compared to Rs 92 crores in Q3FY15, an increase of 20.20 per cent YoY. 

The nine month ending net revenue from operations decreased by 6.63 per cent and reached to Rs 5205 crores compared to Rs 5574 crores for the same period last year. The net profit for nine month period stands at Rs 347 crores compared to Rs 224 crores for the same period last year, an increase of 55.13 per cent YoY.

Raghupati Singhania further added "Auto industry saw some growth in passenger car segment, however commercial vehicle segment is still not out of the woods. Tyre Industry exports were hit primarily in the Middle East and South American markets." On the outlook, Mr Singhania said opening up of the mining sector and boost to the infrastructure would see demand revival in the next fiscal year.

The company is concerned over unabated dumping of Chinese tyres in the Indian market particularly in truck/bus segment as it is causing injury to the industry on account of capacity utilization being impaired. It is expected that the government will urgently take necessary measures to arrest this indiscriminate import of cheap Chinese tyres. 

The stock of company closed at Rs 89.4 on Monday, an increase of 1.88 per cent from previous close. Today it is trading at Rs 88.30, declining by 1.23 per cent.