A leading tyre stock surged 3% after securing a 30 million euros investment from a German entity. This strategic partnership is expected to boost the company’s growth prospects and strengthen its financial position.
Share Price Variation
During Friday’s trading session, JK Tyre & Industries Limited’s share price reached an intra-day high of Rs.419.80 per share, marking a 2.7 percent increase from its previous close of Rs.408.85 apiece. The share has since declined and is currently trading at Rs.412.50 per share.
What happened
JK Tyre & Industries Ltd (JKTIL) has secured a €30 million long-term loan from DEG – Deutsche Investitions- und Entwicklungsgesellschaft (German Investment Corporation) to support the sustainable growth of its production capabilities in Madhya Pradesh, India. The total investment for the project is estimated at €114 million.
The funds will help JKTIL increase its production of Passenger Car Radial (PCR) tyres, with a focus on sustainability, including using biomass for boiler operations and developing tyres made from recycled materials.
This collaboration highlights both companies’ dedication to environmental sustainability and reducing carbon emissions, positioning JK Tyre as a leader in eco-friendly tyre manufacturing.
Management Commentary
Dr Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries Ltd., commented on the development, “We are pleased to be associated with KFW-DEG for providing funding of EUR30 mn. for our Passenger Car Radial (PCR) tyre expansion project is set up for an estimated cost of EUR 114 Mn. The said investment will further strengthen JK Tyre’s market presence in the PCR segment and foster economic and social development in the Country. JK Tyre is a Green Company and is committed to reducing carbon intensity by 50 percent by 2030.”
Capacity Expansion
The ongoing capacity expansions are projected to boost total capacity by around 20 percent in PCR and 10 percent in TBR over the next two years. These new capacities are expected to drive significant revenue growth, with commissioning scheduled across various quarters in FY26.
Also read….
Revenue Mix
JK Tyres’ consolidated revenue mix is comprised of 19 percent from exports, 57 percent from the replacement market, and 24 percent from original equipment manufacturers (OEMs). This distribution highlights the company’s strong focus on the replacement segment, while also maintaining a solid presence in exports and OEM partnerships.
Product Mix
For Q2 FY25, JK Tyres’ revenue mix by product line is 53 percent from Truck and Bus, 31 percent from Passenger Line Radial, 4 percent from 2/3 Wheelers, and 12 percent from other product categories. This distribution reflects a strong emphasis on the Truck and Bus segment, with notable contributions from Passenger Line Radial and other product lines.
Financial Performance
In its recent financial updates, JK Tyre reported a revenue from operations of Rs.3,622 crore for Q2 FY25, reflecting a 7 percent decrease from Rs.3,898 crore in Q2 FY24. Moreover, net profits also declined to Rs.140 crore, down from Rs.249 crore, representing a 44 percent decrease over the same period.
Company Profile
JK Tyre & Industries Limited is a leading tyre manufacturer in India, producing tyres for passenger cars, commercial vehicles, and off-highway vehicles. Known for pioneering radial tyre technology, it operates 12 manufacturing facilities and serves over 105 countries globally.
Written by – Siddesh S Raskar
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.
