JK Tyre & Industries Limited , one of India's leading tyre manufacturers, has reported a robust performance for the first quarter, with significant growth in its domestic operations and improved margins.

Strong Domestic Performance

The company achieved its best-ever domestic performance, with India operations revenue reaching Rs. 3,475.00 crores, marking a 9% year-on-year growth. JK Tyre's domestic sales surged by 11% compared to the same period last year, driven equally by replacement and OE (Original Equipment) segments.

Key Highlights

• Consolidated revenues stood at Rs. 3,891.00 crores, up 6% year-on-year.
• EBITDA improved to Rs. 424.00 crores, with margins expanding to 10.9% from 10.2% in the previous quarter.
• Profit after tax was recorded at Rs. 155.00 crores.
• The company reduced its net debt by Rs. 219.00 crores to Rs. 3,862.00 crores.

Segment-wise Performance

• Truck and Bus Radial (TBR) volumes grew by 7% year-on-year in both replacement and OE markets.
• Passenger radial category witnessed a significant 32% volume growth in the replacement market.
• Farm category volumes showed strong growth, with replacement and OE markets achieving 26% and 69% growth, respectively.
• Two and three-wheeler category volumes registered a robust 53% growth in the OEM segment.

Export Performance

Despite ongoing uncertainties related to U.S. tariffs and geopolitical challenges, JK Tyre's exports remained resilient. Notably, passenger car tyre exports witnessed strong traction on both year-on-year and quarter-on-quarter basis.

Capacity Utilization and Expansion

The company maintained a capacity utilization of nearly 80% on a consolidated basis, with radial capacities operating at over 85%. JK Tyre is progressing with its expansion plans, involving a capex of Rs. 1,400.00 crores, which are on schedule. The capex outlay for the full year stands at Rs. 900.00-1,000.00 crores.

Mexican Operations (JK Tornel)

JK Tornel, the company's Mexican subsidiary, reported revenues of Rs. 505.00 crores, up 12% over the previous quarter. The management expects margin recovery as tariff concerns ease in the U.S. market.

Outlook

Anshuman Singhania, Managing Director of JK Tyre & Industries Limited, expressed confidence in achieving double-digit growth for the full year, supported by festive season demand and the government's infrastructure push. The company expects the Indian tyre industry to achieve 7% to 8% growth, driven by strong domestic replacement demand.

JK Tyre continues to focus on premiumization, with plans to increase the share of 16-inch and above tyres in the passenger car radial segment from the current 26% to around 40% in the coming quarters.

With a strong start and ongoing expansion plans, JK Tyre & Industries Limited appears well-positioned to capitalize on the growing demand in the Indian tyre market.

JK Tyre & Industries , a leading player in the Indian tyre industry, has outlined its financial goals and growth expectations, signaling a positive outlook for the company's future.

Debt Reduction Strategy

The company has set a target debt-to-EBITDA ratio between 1.5X and 1.8X, indicating a strong focus on managing its financial leverage. This strategic move aims to improve the company's financial health and enhance its ability to invest in growth opportunities.

Margin Recovery in Mexico Operations

JK Tyre is anticipating a margin recovery for its Mexico operations following negative quarterly results. This expected turnaround in its international business could contribute significantly to the company's overall financial performance in the coming quarters.

Strong Growth Expectations

The tyre manufacturer is projecting strong double-digit growth, driven by two key factors:

1. Auto Industry Recovery: As the automotive sector rebounds, JK Tyre expects to benefit from increased demand for its products across various vehicle segments.

2. Infrastructure Project Resumption: The company anticipates a boost in tyre demand with the expected resumption of infrastructure projects after elections.

Recent Financial Activities

According to the latest LODR (Listing Obligations and Disclosure Requirements) data, JK Tyre recently conducted a Qualified Institutions Placement (QIP), raising ₹500.00 crores. The company has allocated these funds as follows:

The company has utilized ₹101.32 crores of the raised funds, with ₹92.92 crores specifically directed towards capital expenditure.

Investor Communication

JK Tyre continues to maintain transparency with its investors. The company recently held a Quarter 1 financial year Results Conference Call, with the audio recording made available on their website for investors' reference.