The company has also announced an investment of Rs 1,025 crore over the next two years for capacity expansion.
03 Nov 2023 | 6037 Views | By Shahkar Abidi
JK Tyre's increasing focus on premiumisation across segments is yielding results. That's the word coming in from the company's India President, Anuj Kathuria.
JK Tyre & Industries' increasing focus on premiumisation across segments, particularly in larger rim sizes for passenger car radial (PCR) tyres, the successful launch of new ...
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JK Tyre's increasing focus on premiumisation across segments is yielding results. That's the word coming in from the company's India President, Anuj Kathuria.
JK Tyre & Industries' increasing focus on premiumisation across segments, particularly in larger rim sizes for passenger car radial (PCR) tyres, the successful launch of new and improved products, ongoing cost reduction initiatives, and realisation of expansion plans helped in marking mutlifold growth in net profit during Q2FY24, further given an impetus by the lower cost of commodities.
JK Tyre & Industries on Wednesday reported a multifold jump in its consolidated net profit of Rs 248.62 crore during Q2 FY24, as against Rs 49.61 crore in Q2 FY23. The company's revenues from operations stood 4% higher at Rs 3905.32 crore during Q2 FY24 as against Rs 3,764.34 crore.
Further talking about the company's announcement of an additional investment of Rs 1,025 crore over the next two years for capacity expansion, Kathuria added that the details of the aforementioned investment are still being finalised, with a significant portion of it likely to be allocated to the passenger car radial (PCR) segment.
In a regulatory filing, JK Tyre & Industries' Board of Directors approved the expansion plan, aimed at enhancing the company's presence in the automotive tyre market. However, the filing did not specify the location of the capacity enhancement.
As per the filing, the existing tyre manufacturing capacity of the plant stands at 155.11 lakh tyres per year. The expansion project, estimated to cost Rs 1025 crore, will be funded through equity, internal accruals, and debt. Once completed, the new capacity addition is projected to increase the plant's capacity by 19.45%. The regulatory filing stated that the plant's current capacity utilisation is approximately 95%.
Talking about the Rs 1100 crore capex plans announced last year, Kathuria explained that the first part of the plan, involving a debottlenecking exercise with an investment of around Rs 300 crore, was primarily completed last year. In addition, the PCR capacity expansion at the Banmore plant in Madhya Pradesh has already been commissioned in some phases, with the remainder expected to be completed in the current fiscal year. Approximately Rs 530 crore has been allocated for this project. Similarly, expansion in the Truck and Bus Radial (TBR) segment is underway at the Laksar plant in Uttarakhand, with an investment of around Rs 260 crore. This expansion is also expected to be completed soon.