The shares of the leading tyre manufacturer soared 14 percent to Rs 351.25 a share after the company reported strong Q2 results and announced plans to expand tyre manufacturing capacity.
At 3:28 p.m., JK Tyre and Industries Ltd shares were trading at Rs 338.60 a share on the National Stock Exchange, up Rs 30.45 or 9.88 percent. The company has a market capitalization of Rs 8,297 crores.
According to the company’s exchange filing, The company reported a 3.7 percent increase in revenue from operation year on year, from Rs 3,756 crore in Q2FY23 to Rs 3,897 crore in Q2FY24. During the same period, net profit has increased by 406 percent from Rs 49 crore to Rs 248 crore.
In comparison to the previous quarter, operational revenue increased by 5 percent from Rs 3,718 crore in Q1FY24 to Rs 3,897 crore in Q2FY24, Further net profit jumped by 56 percent from Rs 159 crore to Rs 248 crore. According to the company’s exchange filing.
The company’s board of directors has approved to increase tyre manufacturing capacity of 19.45 percent from its current capacity of 155.11 lakh tyres per year with a capacity utilisation of 95 percent, with an investment of Rs 1,025 crore.
The company made this decision due to the Indian auto industry’s strong growth and the opportunity to expand its market presence in the automotive tyre market. Furthermore, the JK Tyre board of directors approved raising Rs 500 crore through qualified institutions placement in one or more tranches.
The company reported an impressive increase of 96% in operating profitability to Rs.597 crore with a margin expanded by 280 bps on a quarter-on-quarter basis led by improved operational efficiencies, and product premiumization, further supported by raw material prices.
The company’s domestic volume has improved by 8 percent over the corresponding quarter.
JK Tyre & Industry’s share has returned 74 percent in the last six months and 96 percent in a year.
According to the recent shareholding pattern, the company promoters hold a 56.26 percent stake in the company, And foreign institutional investors have a 10.29 percent stake in the company.
JK Tyre & Industries is one of the leading tyre manufacturers in India, with a wide range of products catering to diverse business segments that include Truck/Bus, LCV (Light commercial vehicles), Passenger Cars, MUV (Multi utility vehicles), and Tractors.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
