Rising input costs dragged JK Tyre & Industries’ net profit for the quarter ended December 31 down 75 per cent to Rs 9.1 crore. The company had posted a net profit of Rs 36.46 crore in the same quarter of the last financial year, the company said in a statement. Net sales during the quarter stood at Rs 1,174.4 crore, compared with Rs 798.7 crore in the year-ago period, a 47 per cent rise, the statement added.
“It was a very challenging quarter, as the prices of natural rubber increased 100 per cent, attaining unprecedented levels. Other raw materials have also registered a sharp increase of nearly 40 per cent," Vice-Chairman & Managing Director Raghupati Singhania said. He also added that although the company posted good growth in sales and revised tyre prices upward to some extent, margins were adversely hit by the significant gap between input costs and selling prices. “This has impacted the profitability for the quarter,” he said.
He said the demand for tyres was growing on account of the rapid growth of the auto industry. JK Tyre has undertaken aggressive expansion to meet the increasing demand for its products. The firm is expanding its truck and bus radial tyre manufacturing capacity from 800,000 to 1.4million tyres per year, both at its Mysore and Chennai plants.
A unit, with the capacity to manufacture 25 lakh passenger car tyres per year, is also being set up in Chennai.
“Our projects are well on course and Vikrant Tyre expansion at Mysore is expected to be commissioned by the middle of the current year itself," Singhania added. JK Tyre shares were trading at Rs 119.60 in early trade on the BSE on Tuesday, down 0.17 per cent from the previous close.
