JK Tyre and Industries plans to reduce debt by 50 percent over three years, supported by cost-cutting initiatives and a potential increase in replacement market business and exports, The Economic Times reported.
The paper spoke to company CFO Sanjeev Aggarwal who stated the company was pare its Rs 5,000-crore debt down by more than half in the coming three years with a series of cost-cutting initiatives and expected improvement in capacity utilisation.
India’s largest commercial vehicle (CV) tyre maker has battled crippling slowdown in the domestic auto sector and shifted focus to push on the replacement and export markets to de-risk from the situation, it added.
As per Aggarwal, the company expects double-digit growth in both businesses to continue. JK Tyre exports to 100 countries and is attempting to break into eastern and southern Europe and deeper into Africa.
The replacement market grew by 12 percent in 2019 while the overseas market expanded by 40 percent, he added. Aggarwal said, over the past three quarters, the replacement market share increased from 65 percent to 70 percent while revenues from exports jumped from 11 percent to 16 percent.
The company has also deferred its Rs 675-crore investment in Cavendish Industries by a year on the back of poor demand in the CV segment. The fund was to expand the capacity of truck and bus radial plant by half a million tyres. JK Tyres acquired Cavendish was the BK Birla group in 2016.
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