By Ayushi Gupta
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Updated On: 07-Feb-2024 01:08 PM
JK Tyre plans INR 1400 crore investment in expansion over next 2 years to meet growing demand, tripling net profit.
JK Tyre & Industries is planning to invest INR 1400 crore over the next two years to expand its capacity. Anshuman Singhania, the Managing Director at JK Tyre & Industries, mentioned to ET that the company is currently utilizing 85% of its available capacity and intends to inject fresh capital to meet the growing demand for its products. "We are investing INR 800 crore to enhance capacity at our facilities," he said. "This investment cycle is on the verge of completion. Separately, we are looking at investing INR 1400 crore to increase production and maintain our leadership in radials over the next two years"
JK Tyre & Industries aims to expand its capacity to meet the increasing demand for truck, bus, and passenger car radial tires in the local market. Anshuman Singhania shared that the company's net profit almost tripled to INR 227 crore in the quarter ending December 31, 2023, driven by higher sales, an improved product mix, and optimization of its product range. The company recorded net revenue of INR 3,700 crore, a 2% rise compared to the same period last year. Notably, the company reduced its net debt by 24% to INR 3,456 crore from the levels recorded in March 2023.
Last quarter, earnings before interest, tax, depreciation, and amortization (EBITDA) surged by 61% to INR 563 crore, with an EBITDA margin of 15.2%. The Chairman & Managing Director of JK Tyre & Industries, Raghupati Singhania, mentioned, "The demand outlook remains optimistic, driven by the strong momentum in economic activity and positive consumer sentiments, across product categories. The global demand scenario is still challenging due to geo-political disturbances affecting exports during the quarter." He added that exports currently contribute to 15% of the company's revenues.
JK Tyre & Industries successfully raised INR 500 crore through a QIP (Qualified Institutional Placement) in December 2023, receiving significant interest from investors. Considering the company's performance, the Board declared a dividend of Re 1 per equity share, having a face value of INR 2 per share.