JK Tyre is augmenting the lineup of products made for battery-run models, as its capacities are flexible enough to realign with the market demand, managing director (MD) Anshuman Singhania has said.
The comments come at a time when there are concerns about a slowdown in the electric vehicle (EV) segment.
“In the overall EV market, there is a thrust from the government on the bus segment, where we are playing a very active role. In fact, we have one of the highest shares in this segment, as we have specialised tires for EV application,” the MD of JK Tyre and Industries said in a post-earnings conference on August 3.
“We don't see that much of a slowdown in the bus segment. Our capacities, which we have laid down, are all interchangeable.”
Singhania said also said the tyre maker has already bagged sizable orders from automakers working across EV segments.
“As we have already developed tyres for EVs, there is no further type of extra investment (required) for the EV capacities. While there is a slow buildup of the sales in the EV (segment), there has been interesting and new projects which are coming the way of the automakers, which we are actively engaging with,” Singhania said.
Hitching ride on premiumisation
While the two-wheeler segment continues to boom, three-wheelers would see a further surge. “There might be some small breaks in the EV growth or the volume. But looking at the long-term scenario, the EV story looks good for India,” Singhania said.
The company is expanding its output in the Passenger Car Radials (PCR) and Truck and Bus Radials (TBR) segments, while also looking to expand its presence in the premium two-wheeler market, which is dominated by Royal Enfield but has seen an influx of new entrants such as Hero MotoCorp, Bajaj Auto and TVS Motor Company.
“We are actively participating with the big names into two-wheeler and we are taking part in their premium range. And some of the ranges, which they're coming out, you know, in this year or next year, we are in constant dialogue and participating in their account, we are also catering to the aftermarket as well. So, our mix is both with the OEM (original equipment manufacturer) and as well as the aftermarket,” noted Singhania.
A good Q1
JK Tyre & Industries reported a 37 percent year-on-year increase in consolidated net profit at Rs 211 crore in the first quarter of this financial year.
Exports recorded healthy double-digit growth, despite geo-political disruptions and rising ocean freight.
Exports to geographies such as the Americas, Latin America, Europe, the Middle East, and Asia are seeing good traction. “With inventories which were built up, particularly in the US market, is reducing and fresh demand coming back. Our participation in some of these territories have yielded good results," Singhania said.
When asked about rising input costs, especially those for natural rubber, the company said the cost was up 3-4 percent sequentially and is expected to rise further in the second quarter. The tyre maker managed to keep margin levels healthy by passing on the price increase to customers.
The company also expects domestic demand to revive, helped by infrastructure and construction projects, the push in rural markets, a favourable monsoon and the upcoming festival season.
“While there was some sluggishness in the CV market, it should also pick up... by the end of this quarter, we are very optimistic about the demand, which is coming in the forthcoming quarters,” Singhania said.
At 10.20 am, the JK Tyre stock was trading at RS 423 on the National Stock Exchange, down 1.88 percent from the previous close on larger weakness in the market, spooked by US recession fares.
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!
