India's JK Tyre's quarterly profit drops for first time in two years

JK Tyre & Industries

05/11/2024 11:14

Nov 5 (Reuters) - India's JK Tyre & Industries  JKIN.NS  reported its first quarterly profit fall in two years on Tuesday, hurt by weak tyre sales
to car, bus and truck makers.
    The tyre maker's consolidated net profit for the July-September quarter fell 44% year-on-year to 1.35 billion rupees ($16.1 million).
    Its second-quarter revenue declined 7% to 36.22 billion rupees, after dropping for the first time in four years in the April-June period.
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3MC02F
    
    KEY CONTEXT
  

Domestic sales of buses and trucks fell 12% in the second quarter, while car makers' sales declined for the first time in more than two years. This hurt JK
Tyre's earnings as it garners over 80% its revenue from such customers.
        Indian tyre makers are also grappling with higher rubber costs due to global supply shortages, which pushed up domestic rubber prices by 20% during
the quarter.
  
    Larger rival CEAT  CEAT.NS  and Goodyear India  GDYR.BO  also reported a decline in quarterly profit. MRF  MRF.NS  will report its results later this
week.
    
    PEER COMPARISON
  

                                                        Estimates                      Analysts'                                               
                                                          (next 12 months)               sentiment                                             
                             RIC      PE     EV/EBITDA  Revenue growth  Profit growth  Mean rating*  # of analysts  Stock to price             Div yield (%)
                                                        (%)             (%)                                           target**                 
 JK Tyre &                                                                                                                                   
 CEAT Ltd                                                                                                                                    
 Apollo Tyres Ltd                                                                                                                            
 MRF Ltd                                                                                                                                      
 * The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

    JULY-SEPTEMBER STOCK PERFORMANCE
  



($1 = 84.0680 Indian rupees)

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JK Tyre vs Peers    https://tmsnrt.rs/4fwKPsq
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 (Reporting by Nandan Mandayam in Bengaluru; Editing by Sonia Cheema)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))