JK Tyre & Industries, which reported a near-three-fold rise in consolidated profit to Rs 112 crore during the fourth quarter of the financial year 2022-23 (Q4 FY23), is looking at double-digit growth in the current financial year. It hopes to achieve this on the back of reduced input costs, a buoyant domestic automobile market, and enhanced opportunities in exports, said a senior official of the company.
“We are looking at strong double-digit growth in the top line this year. We are looking at healthy numbers for our bottom line, also,” said Anshuman Singhania, Managing Director, JK Tyre and Industries Ltd, at a post-result conference call.
He also revealed that the company has not taken any price revisions in Q4 as it is “cautiously watching” the commodity prices, which are “looking stable” at the moment.
Singhania expects the current demand in the domestic automobile sector to continue. This would lead to 10-12 percent growth for the tyre industry. In his view, the commercial vehicle (CV) segment, which saw muted growth over the last eight to nine quarters, has seen a resurgence. He also believes that the passenger vehicle (PV) segment, which was impacted by the semiconductor crisis, will see sustained growth.
“The government’s push on infrastructure development, the easing in chip shortage, and increasing disposable income are fuelling the automobile industry. We will continue to witness buoyant demand, and remain optimistic on the tyre industry’s growth path in the coming years,” added Singhania. He is bullish on the replacement tyre market for internal combustion engine vehicles (ICEVs), he added.
JK Tyre has also reaffirmed plans to invest Rs 800 to enhance capacity to 34 million units per annum by the fiscal end.
According to Singhania, JK Tyre has already announced two expansion plans. One of these is in passenger car radial (PCR) tyres, for which the company is spending Rs 530 crore. The second is in truck bus radial (TBR) tyre expansion, for which Rs 260 crore is being spent, said Singhania.
“We have other modernisation plans, too,” added Singhania.
He clarified that the company is not looking at inorganic growth in domestic or overseas markets.
Meanwhile, JK Tyre is looking for strong growth in the electric vehicle (EV) space, for which it is investing a significant amount in research and development (R&D) capabilities. However, it is not building any dedicated assembly lines for EV tyres.
“We have already announced our capex plans in the passenger car segment, but there have been developments in terms of building R&D capabilities in our effort for the passenger as well as commercial (vehicles). So, that is part of our normal capex, which we spend on our product development, whether it be for India or for export markets. There is no dedicated (assembly) line for producing EV tyres, as these lines are modular and can make any kind of tyres,” Singhania further added.
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