India’s largest maker of radial tyres for trucks and buses, JK Tyre & Industries Ltd, to shore up its operating margin by increasing raw material costs. During the quarter period of October-December 2022-23, the consolidated net profit is Rs. 66.75 Crores, whereas Rs. 53.92 crores in the same period of last financial year.
During the third quarter of 2021-22, the company’s total income is Rs. 3083.95 crores and it raised up by 17% to Rs. 3622.62 crores in the next year’s quarters. We also see that the total volume increased by 10 per cent in the current quarter.
Scope of Margins
According to Anuj Kathuria, India’s President of JK Tyre, “the volume growth in Q3 was around 10%, when compared to the same fiscal of last year. The revenue growth is also around 17% & the extra margins are watched up”.
They are focusing to increment both in segments as well as the replacement market. During fiscal 2022, the income of the company is Rs. 3076 crores increased by 17.5% in fiscal 2023 and now the income is Rs. 3,612 crores.
- The volume growth in Q3 was around 10%.
- The company’s operating performance is increased to 24.1%, now at Rs.339 crores.
- The profit after the tax is around 15% growth in fiscal 2022-23.
- Tries to reduce the debt to almost 25% in the next fiscal year.
When assessing the company’s operating performance is at Rs. 273.5 crores in the last fiscal year and is increased to 24.1%, now at Rs.339 crores.
The profit after the tax in fiscal 2021-22 is Rs. 56.9 crores and is raised to Rs. 65.6 crores, which is around 15% growth in fiscal 2022-23. The OPTG Profit Margin also increased from 8.9% to 9.4%.
The three key factors that improve the margin of Q3FY23 are the Easing of material prices, Continued cost control, and Timely price revisions.
Anuj also said, ”for debt, we have been doing certain good implements on the long-term borrowings and also try to make capital events much more smarter. We reduce the debt to almost 25% in the next fiscal year”.
The Board has approved the issuance of 24,000 compulsorily convertible debentures by way of a preferential issue on a private placement basis to the International Finance Corporation (acquirer).
Subject to shareholder approval, JK Tyre plans to convert it into equity shares at 180.50 a share.
