JK Tyre & Industries to Invest INR 1400 Crore for Capacity Expansion in Next 2 Years

Key Highlights

• JK Tyre & Industries to invest INR 1400 crore in the next two years for capacity expansion.
• Managing Director, Anshuman Singhania, reveals plans to enhance production and maintain leadership in radials.
• EBITDA grows by 61% to INR 563 crore, with a margin of 15.2%.
• Global challenges acknowledged, with 15% of revenues coming from exports.
• Successful INR 500 crore QIP in December 2023.
• Board declares an interim dividend of Re 1 per equity share (50%).

In a strategic move to meet the increasing demand for its products, JK Tyre & Industries is gearing up for a substantial investment of INR 1400 crore over the next two years. Anshuman Singhania, the Managing Director at JK Tyre & Industries, shared insights, revealing the company's plans to invest fresh capital.

Capacity Expansion in Full Swing

Singhania disclosed that the company is currently utilizing 85% of its available capacity. To address this, they are in the final stages of an INR 800 crore investment cycle aimed at enhancing existing capacity at their facilities. Simultaneously, JK Tyre & Industries is eyeing an additional investment of INR 1400 crore to further increase the production and solidify its leadership in radial tires.

Stellar Financial Performance

The decision comes on the heels of a remarkable financial quarter for the company. In the three months ending December 31, 2023, JK Tyre & Industries witnessed a nearly threefold increase in net profit, reaching INR 227 crore. This rise can be attributed to increased sales, a more favorable product mix, and the optimization of their product range.

Strengthening Market Position

With a focus on the local market, the company aims to expand capacity to meet the rising demand for truck, bus, and passenger car radials. The net revenue for the quarter stood at INR 3,700 crore, marking a 2% increase over the same period the previous year. Notably, JK Tyre & Industries successfully reduced its net debt by 24% to INR 3,456 crore from March 2023 levels.

Robust Earnings and Optimistic Outlook

Earnings before interest, tax, depreciation, and amortisation (EBITDA) recorded substantial growth, rising by 61% to INR 563 crore. The EBITDA margin for the quarter stood at 15.2%. The Chairman and Managing Director, Raghupati Singhania, expressed confidence in the optimistic demand outlook, driven by strong economic activity and positive consumer sentiments.

Global Challenges and Financial Moves

Despite the positive momentum, the CMD acknowledged the global challenges, especially geopolitical disturbances affecting exports during the quarter. Currently, exports contribute 15% to the company's revenues. In response to the promising financial outlook, JK Tyre & Industries successfully raised INR 500 crore through a Qualified Institutional Placement (QIP) in December 2023.

Board Declares Interim Dividend

In recognition of the company's stellar performance, the Board declared an interim dividend of Re 1 per equity share (50%), each having a face value of INR 2 per share. This move reflects the company's commitment to rewarding its shareholders in league with its impressive financial achievements.

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CarBike360 Says

As JK Tyre & Industries positions itself for further growth and market leadership, these strategic investments and financial moves underscore the company's dedication to meeting the evolving demands of the industry.