Emkay Global Financial's research report on JK Tyre
JK Tyre (JKI) Q2 results were soft, impacted by ~16% sales decline in Mexico on weak Latin American demand and 10% currency depreciation vs INR. While domestic MHCVs have been weak in H1 (JK is among the segment leaders with 53% CV contribution in consolidated sales), outlook is improving amid expected pickup in infra/capex activity and a favorable base. Further, softening rubber prices (down over 20% from recent peak), pricing action (~3-3.5% YTD), and better mix should aid margin recovery Q4FY25E onwards. Q2 likely represents a bottom quarter with improving outlook for demand and profitability.
Outlook
We cut FY25E/26E/27E PAT by ~18%/10%/8% (factoring in Q2 miss, gradual margin recovery), and retain BUY (revised TP of Rs 650 at 15x Sep-26E PER) amid attractive valuations (~8.5x Sep-26E PER vs 17.3 peer average).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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!
