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CMD Raghupati Singhania said the company will deploy around Rs 1,000 crore for expanding its Passenger Car Radials capacity while Rs 380-390 crore will be spent on ramping up the output of Off The Road and Truck and Bus Radials.
From a macro point of view, the Budget presented by the Finance Minister is a growth-oriented one with special focus on rural, agriculture and infra sectors.
The Chinese are dumping tyres at 25-30 percent lower, which is lower than the raw material prices, said Raghupati Singhania, CMD, JK Tyre and Industries leading to a downtick in capacity utilisation for the industry.
Speaking to CNBC-TV18‘s Rukmini Rao, CMD of JK Tyres, Raghupati Singhania said that the two and three wheeler segment is looking more attraction now.
JK Tyres & Industries Ltd on May 16 reported a 10.20 percent rise in consolidated net profit at Rs 116.77 crore for March quarter.
"With the completion of the acquisition of Cavendish Industries we have further strengthened our position in the truck and bus radial segment. It has also given us entry into two and three wheeler vertical," JK Tyre & Industries Chairman and MD Raghupati Singhania told reporters here.
The company had posted a consolidated net profit of Rs 91.81 crore in the same period last fiscal. Net sales during the period under review stood at Rs 1,597.74 core as against Rs 1,825.76 crore in the same period a year ago, down 12.48 percent, JK Tyres & Industries said in a BSE filing.
Commenting on the trend, ATMA Chairman Raghupati Singhania said: "Tyre industry is passing through a difficult year as production growth is not only slackening but contraction is being witnessed across key tyre categories."
The company had posted a net profit of Rs 76.45 crore during the same period of previous fiscal. Net sales of the company, however, declined to Rs 1,790.91 crore from Rs 1,858.68 crore during the same period of previous fiscal, JK Tyre & Industries said in a statement.
JK Tyre & Industries today reported 55.53 percent jump in consolidated net profit at Rs 91.81 crore for the third quarter ended December 31, 2014, on account of company's focus on radial tyres.
The government maintains a high import duty on rubber to protect the domestic rubber farmers.
The company is planning to expand its Chennai plant with an investment of around Rs 1,400 crore.
JK Tyre's net sales during the quarter under review stood at Rs 1,799.01 crore compared to Rs 1,729.39 crore in the same period last fiscal. The company today also announced capex of Rs 1,430 crore at its Chennai plant for both truck/bus and passenger car radials.
Commenting on the slowdown in auto ancillary sector Baba Kalyani, CMD, Bharat Forge Limited said,"You have to calibrate investments based on what market conditions are."
