JK Tyre & Industries today reported 22.33 per cent decline in consolidated net profit at Rs 86.19 crore for the third quarter ended December 31, 2016, dragged down by higher raw material prices.
The company had posted a consolidated net profit of Rs 110.97 crore in the same period last fiscal, JK Tyre & Industries said in a BSE filing.
Total income from operations during the period under review stood at Rs 1,986.72 crore as against Rs 1,767.16 crore in the year-ago quarter, up 12.42 per cent.
In the third quarter this fiscal, cost of materials consumer stood at Rs 1,115.14 crore as against Rs 882.5 crore, an increase of 26.36 per cent.
"Unabated increase in the rubber and other raw material prices in the last few months continue to be an area of great concern and will remain a challenge for the tyre industry. We have no option but to revise the selling prices in view of the increasing costs," JK Tyre & Industries Ltd Chairman & Managing Director Raghupati Singhania said.
He said the company recorded higher volumes in all segments over the corresponding quarter and maintained its leadership in truck/bus radials segment.
"The value of sales would have also registered an increase but, for the lower selling prices during the period," Singhania said adding, "uncertainty around GST impacted commercial vehicle segment, whereas demonetisation hit two and three-wheeler tyre sales".
On the outlook, he said, resolution of GST, phasing out of the demonetisation effect coupled with government's focus on roads and infrastructure, supported by cheaper consumer financing, is likely to revive commercial vehicle sales in the coming months.
Singhania, however, lamented "recent Budget did not address inverted duty structure as well as dumping of cheap truck radials from China. There is an urgent need for the government to impose anti-dumping duty on the unabated import of cheap Chinese tyres at the earliest".
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
