JK Tyre’s Q1 FY18 revenue at INR 14469 million
JK Tyre and Industries reported standalone income of INR 14469 million for the three months ended June 30, 2017. Total expenses went up by 2.5 per cent to INR 15474.3 million due to increase in raw material costs, transition to new emission norms and new indirect tax regime. Owing to this, the company reported a net loss of INR 658.6 million in Q1.
“We are indeed passing through challenging times. The raw material costs increased by about 30 per cent over the corresponding quarter. Such steep increase in prices of raw materials without commensurate increase in selling prices dented margins. Moreover, unabated imports of cheap Chinese radial tyres impacted both volumes as well as prices of Truck/Bus radials. In addition, Commercial Vehicle manufacturers cut production, to destock inventories and transition to new emission norms. Dealers in the replacement market also, were reluctant to off take tyres before GST introduction. JK Tyre being a market leader in Truck/Bus radial segment in both OEM and replacement segment had to bear the brunt,” said Dr Raghupati Singhania, Chairman and Managing Director, JK Tyre.
On a positive note, Dr Singhania felt, that with the smoothening out of the GST roll out, the situation is likely to be somewhat better in the coming months.
“Expected imposition of anti dumping duties on cheap Chinese imports will be a welcome step and should improve the commercial tyre market. JK Tyre continues to enlarge the width and depth of its distribution network as replacement market accounts for 60 per cent of its sales. The newly acquired 2-3 wheeler capacity in Cavendish is gaining market share in the segment, despite the economic disruptions caused in the recent months,” the company said in a statement.