JK Tyre expects CV business to outperform in FY24, says no plan to sell Mexico business

India's biggest commercial vehicle tyre manufacturer JK Tyre is hopeful that its core business will see growth between 12-14 percent in the current financial year, and outperform the passenger vehicle segment.

In an interaction with CNBC-TV18 post its quarterly results, JK Tyre's India business President Anuj Kathuria said that the company is hopeful of double-digit revenue growth in financial year 2024.

55 percent of JK Tyre's revenue comes from truck and bus radial tyres, while 28 percent comes from passenger car tyres. Although Kathuria said that demand is robust in both segments, it expects the larger business to do well.

Ratings agency ICRA believes that India's commercial vehicle industry could see volume growth of 7-10 percent in financial year 2024 led by government spending on infrastructure, replacement demand, e-commerce expansion and back-to-school and office scenarios.

JK Tyre is expanding capacity in its truck-bus radials and Passenger Car Radials segment and Kathuria believes that the expanded capacity will come on stream by the second half of the current financial year.

"By Q3 and Q4, which is the time when demand generally goes up, we will have these capacities available for us and we will be able to realize this," Kathuria said, further adding that the Passenger Car segment is seeing very high capacity utilisation.

Kathuria further said that the company is well on course to bring its total debt down to Rs 3,500 crore by financial year 2025. Currently, it has managed to bring the debt down to Rs 4,500 crore from Rs 5,000 crore earlier.

JK Tyre's margin returned to double digits during the March quarter. Kathuria said that the input prices are currently under control with respect to crude and other materials, and if these trends remain, there is scope to expand margin further.

The company's Mexican business saw its operating profit decline compared to the same period last year. Kathuria said that there is no reason to say that the business is not doing well and also denied any plans to sell the Mexico business.

Shares of JK Tyre are trading 7.6 percent lower at Rs 184.35.