JK Tyre Q1 Results: Net profit up 37% YoY to ₹211 crore from ₹154 crore

JK Tyre Q1 Results: JK Tyre and Industries has reported its first quarter earnings report for FY2024-25 on August 3. The company saw its net profit rise 37.3 per cent for the period at ₹211.44 crore, compared to ₹154 crore in the same quarter last year.

Revenue has been reported 2.1 per cent down year-on-year (YoY) at ₹3,639 in Q1FY25 crore compared to ₹3,718 crore in Q1FY24.

Further, earnings before interest, taxes, depreciation and amortisation or EBITDA is up 9.3 per cent YoY at ₹500 crore, compared to ₹457.3 crore in the same period last year; and margin is at 13.7 per cent compared to 12.3 per cent YoY.

Shares of the company closed at ₹431.5 each on August 2 (Friday), down 1.17 per cent from its opening price. Overall the stock has gained 62.83 per cent over the past year.

Tyremakers on Bull Run

Over the past months, as the demand forecast improved, the shares of tyre manufacturers such as JK Tyre & Industries, MRF Apollo Tyres, Ceat, TVS Motor Company, and Goodyear India, were on a bull run. According to reports, in reaction to rising costs for essential raw materials, domestic tire makers raised their prices by around 1.5% to 2.5% starting on July 1, 2024 (natural rubber).

In their analysis, ICICI Direct Research said that this is encouraging for the home tyre market given the extraordinary increase in natural rubber costs, which are currently trading at almost ₹200/kg (an 11-year high). The majority of tire businesses had projected a 4-5% increase in raw material costs for Q1FY25 compared to Q4FY24 (natural rubber was quoted at around ₹180/kg), and they indicated that they would partially pass on the increases to end users through ~1-2% price hikes.

JK Tyre manufactures tires, tubes, and flaps for automobiles. It primarily serves the transportation and commercial vehicle industries. The brokerage said that Indian tire producers are still catching up to global producers. It also mentioned that premiumisation and increasing demand are two further benefits for the industry.