India's JK Tyre posts four-fold jump in profit on lower costs, strong demand

JK Tyre & Industries

04/08/2023 09:11

BENGALURU, Aug 4 (Reuters) - India's JK Tyre & Industries  JKIN.NS  on Friday reported a more than four-fold
jump in first-quarter profit, boosted by lower input costs and strong demand for vehicles. 
    Consolidated net profit was 1.54 billion rupees ($18.6 million) for the quarter ended June 30, compared with 372
million rupees a year earlier. 
    Revenue from operations rose 2% to 37.18 billion rupees, while total expenses fell about 2%.
    
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN39L0N7
    
KEY CONTEXT 

Price of rubber, a key raw material for tyre-makers, fell about 20-25% over the last year through May, per HDFC
Securities. Meanwhile, the sales of vehicles in India rose more than 11% in April-June, spurring the demand for
tyres.
     JK Tyre's earnings were in line with larger competitors MRF  MRF.NS  and CEAT  CEAT.NS .  
    The JK group company's profit slid in the first half of last fiscal year before reversing declines in the second.
    
PEER COMPARISON 

                                   Valuation (next     Estimates (next 12          Analysts' sentiment       
                                     12 months)             months)                                          
                       RIC        PE      EV/EBITDA  Revenue      Profit      Mean      # of      Stock to   Div
                                                     growth       growth      rating*   analysts  price      yield
                                                                                                  target**   (%)
 JK Tyre & Industries   JKIN.NS    11.49       6.53     9.33        43.92     Sell             2    1.50         0.75
 Ltd                                                                                                         
 Apollo Tyres Ltd       APLO.NS    16.19       7.81     8.01        36.02     Buy             28    1.06         0.93
 CEAT Ltd               CEAT.NS    18.52       7.74     7.16        78.94     Hold            16    1.12         0.49
 MRF Ltd                MRF.NS     25.53      12.45     9.33        55.74     Sell             8    1.25         0.16
 
    
* The mean of analyst 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
    
APRIL-JUNE STOCK PERFORMANCE 
 
   
-- All data from Refinitiv

-- $1 = 82.7710 Indian rupees

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APRIL-JUNE STOCK PERFORMANCE    https://tmsnrt.rs/3DI77GI
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 (Reporting by Hritam Mukherjee in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))