JK Tyre to invest Rs 1,400 crore for capacity expansion, product development in two years

jk tyre to invest rs 1,400 crore for capacity expansion, product development in two years

JK Tyre to invest Rs 1,400 crore for capacity expansion, product development in two years

JK Tyre and Industries has announced an investment of Rs 1,400 crore in Truck and Bus Radials (TBR), Passenger Car Radials (PCR) and All Steel Light Truck Radial (ASLTR) tyres in a phased manner over the next two years to meet the sustained growth in demand from automakers in the coming quarters.

The project will be funded by Rs 730 crore debt and the rest through equity and internal accruals. In FY24, JK Tyre did a Qualified Institutional Placement (QIP) issue in January 2024 for Rs 500 crore for the upcoming capex.

“The investments of Rs 1,400 crore will be completed in the next 18-20 months,” Raghupati Singhania, Chairman and Managing Director (CMD), JK Tyre told reporters in a post earnings conference.

“Once deployed, our PCR capacity be increased by another 16 percent over and above our current capacity. TBR are very marginally,” he added.

Currently, the homegrown tyremaker’s total capacity is nearly 34 million units of tyres per annum, out of which PCR is about 15 million, TBR 4 million and the balance comprises Truck Bus Bias (TBB), two/three wheelers, etc.

Fund deployment

Singhania said the company will deploy around Rs 1,000 crore in expanding its PCR capacity while another Rs 380-390 crore will be spent on ramping up the output of OTR (Off The Road) and TBRs. He also hinted that the company will roll out tyres tailormade for Sports Utility Vehicles (SUV) in the aftermaket.

When asked if the company will also be spending on building capacities for  Electric Vehicle (EV) tyres, Singhania noted, “We are constantly upgrading our equipment wherever required and there is no separate investment being made or earmarked for EVs.  We are already supplying EV tyres for (battery-driven) buses and have the technological capabilities to roll out such products.”

During the last fiscal, the homegrown tyremaker invested Rs 800 crore for capacity enhancement and product development.

“We have completed that project and started deriving production out of it earlier than we even planned. And as far as the capacities are concerned, we have been able to increase our PCRs’ capacity by  16 percent itself and TBR capacity marginally by 10 percent,” Singhania added.

Q4 show

Meanwhile, the firm's revenue from operations saw a modest increase of 1.8 percent at Rs 3,698.45 crore in Q4 of FY24, up from Rs 3,632.47 crore a year ago, while its net profit rose  2X to Rs 811 crore. In addition, the company announced a final dividend of Rs 3.50 per equity share for FY24.

Singhania attributed this performance to continued focus on "product premiumisation", widening market reach, "tech-enabled manufacturing" and "digitalisation" across operations achieving better efficiencies.

“Moreover, our strategic initiatives to fortify our balance sheet through equity infusion yielded fruitful results, reinforcing our financial resilience,” he added.

JK Tyre said its exports were flat during the year because of geopolitical disruptions that also led to freight hikes and a rise in container costs. The company expects to improve its export volumes in the next few quarters.

FY25 outlook

Talking about the outlook for FY25, Singhania said, “While the passenger vehicles and two-wheeler segments are seeing good traction, commercial vehicles, which are flattish, may see marginal growth. On the other hand, exports are likely to catch on,  helping us in generating demand. On the whole, the automotive sector may see around 6 percent growth during the same period.”

He revealed that the company expects a 9-10 percent growth in its topline in FY25, buoyed by government infrastructure spending, rising domestic auto demand and a recovery in exports.

OTHER NEWS

2 hrs ago

Namibia all-rounder David Weise announces retirement from International cricket after England clash in T20 WC

2 hrs ago

Jaiswal gets nod to open batting from Vaughan in T20 World Cup Super 8: 'Virat or Rohit, doesn't matter to me...'

2 hrs ago

Delhi: Night temperature still in the 30s, respite likely on Wednesday

2 hrs ago

T20 WC: Batter Jonny Bairstow believes England players 'were relaxed' against Namibia

2 hrs ago

Dividend Alert! Tata Investment, HDFC AMC among stocks to trade ex-dividend on June 18 – Full List

2 hrs ago

SBI Increases MCLR; Loan Rates To Go Up? Read How It Affects Loan Borrowers

2 hrs ago

Elon Musk vs ex-Union Minister over EVMs, Rahul Gandhi jumps in too

2 hrs ago

Lucknow Man on Ventilator Marries Daughters in ICU

2 hrs ago

Revised NCERT textbook mentions Babri Masjid as ‘three-domed structure’, shortens Ayodhya section from four two pages – Key changes listed here

2 hrs ago

The Fall Guy Review: Ryan Gosling, Emily Blunt Are At Their Goofy Best In This Exhilarating, Meta Stuntman Comedy

2 hrs ago

Modi’s foreign policy stamp

2 hrs ago

Anant Ambani-Radhika Merchant pre-wedding bash: From luxury cruise in Italy to concert in Cannes- a look at grand affair

2 hrs ago

'It will make jobs…': Bill Gates' message on AI to IT professionals

2 hrs ago

Tainted leaders affecting BJP, ‘foreign powers’, Thrissur win — Hindu Right Press on poll results

2 hrs ago

How PCB sabotaged Pakistan's T20 World Cup 2024 campaign

2 hrs ago

RBI awarded Risk Manager of the Year Award 2024 by London-based Central Banking

2 hrs ago

How Prakash Ambedkar's VBA denied MVA victory in four Maharashtra seats

2 hrs ago

Upcoming IPOs: Nine public issues and one new listing scheduled for next week; check full list here

2 hrs ago

IPO Calendar Next Week: 3 mainboard, 5 SME IPOs to keep D-street active next week post-election rally

2 hrs ago

F&O Talk| Expect consolidation breakout in Nifty above 23,500, buy on dips: Sudeep Shah of SBI Securities

2 hrs ago

Daribaba is the King Lear to my Cordelia: Sohini Sengupta

2 hrs ago

IND-W VS SA-W Live Score, 1st ODI: India Women vs South Africa Women Live Updates

2 hrs ago

The World Cup kind of starts again now: Mitchell Marsh

2 hrs ago

Moto Edge 50 Pro available at discount on Flipkart, can be yours for under Rs 28,000

2 hrs ago

Manipur HC issues notice to state edu dept on PIL by transgender medical officer

3 hrs ago

Nifty Record Highs, What's The View Of Market Next Week? | Sectoral Buying, Buy On Dips Approach

3 hrs ago

As Hyundai India eyes listing, here are some of nation's biggest IPOs

3 hrs ago

T20 WC: Stoinis, Head fifties help Australia overcome spirited Scotland by five wickets, end group stage unbeaten

3 hrs ago

Southern spectacles help Hindi film actors stage a comeback

3 hrs ago

'Modi, Shah Will Break TDP, JD(U), LJP If...': Sanjay Raut's Big Claim Over Speaker Post, KC Tyagi Reacts

3 hrs ago

"Couldn't execute our fine start with the ball for long enough...": Scotland skipper Richie after loss to Australia in T20 WC

3 hrs ago

'Black box': Rahul Gandhi backs Tesla CEO Elon Musk's concerns over EVMs

3 hrs ago

Not taking Nepal lightly: Kagiso Rabada expects South Africa to play better cricket

3 hrs ago

KFCC Team Visits Renuka Swamy’s Family; Extends Financial Assistance Of Rs Five Lakh

3 hrs ago

Kannappa Teaser: Glimpse Of Mohanlal’s Character Drive Fans Into A Frenzy

3 hrs ago

View: India must revive its Tibetan Buddhist links to show a mirror to China

3 hrs ago

PM Modi to inaugurate Nalanda University campus in Bihar

3 hrs ago

In Pics: Shivraj Chouhan’s Train Journey For First Visit To Bhopal As Union Minister

3 hrs ago

Cricket fan meets Team India at his New York hotel. Internet is jealous

3 hrs ago

Why the Jammu terror strikes call for a new resolve