JK Tyre Q3 results: Net profit grows manifold to Rs 230 crore

JK Tyre Q3 results: Net profit grows manifold to Rs 230 crore

JK Tyres & Industries Thursday reported consolidated net profit of Rs 230.46 crore for the third quarter ended Dec 31, 2020 on back of a strong recovery in demand in the automotive space aided by a favourable festive season, increased consumer preference for personal mobility solutions, good monsoons and better-than-expected economic revival.

The company had posted net profit of Rs 10.27 crore in the corresponding period of the last financial year.

Consolidated sales during the quarter under review touched a record high at Rs 2766 crore, which is an increase of 26% over the year-ago period. Total expenses last quarter rose 13% to Rs 2473 crore. Operating quarter in the period more than doubled to Rs 507 crore.

Raghupati Singhania, Chairman and Managing Director, said, “JK Tyre turned out an excellent performance in Q3 – in terms of sales and profitability. This was largely driven by the increased demand for passenger, commercial vehicle as well as farm tyres. Continued focus on improvement in operating efficiencies and reduction in interest costs, contributed to improved profitability.” All nine, JK Tyre plants in India, operated at close to 96% capacity utilization during Q3.

Cavendish Industries – a JK Tyre subsidiary – also performed well last quarter. Capacity utilization at its three plants was nearly 95%. “Cavendish achieved sales of Rs 788 Crores and attained an all-time high PBT of Rs 92 Crores during the quarter under review”, JK Tyres & Industries said in a statement.

Singhania said though raw material prices may firm up moderately in the coming quarters, the price increase can be managed. Singhania foresees sustained sales and rrofitability going ahead.

He added JK Tyres & Industries, which had put on hold capex plans due to the uncertain market conditions amid the coronavirus pandemic, may have to revisit investment plans if the demand momentum continues as strongly. “We want to go slow on capex to ascertain whether the current demand we are seeing in the market is definitive or spasmodic. After that, we will have to decide whether we need to invest further to expand capacity to meet market demand”, Singhania said.

Shares of JK Tyres & Industries closed at Rs 115.60 apiece, up by 8.80% on the Bombay Stock Exchange (BSE).

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