The share price of JK Tyre & Industries surged 9 percent on Thursday after the company reported a strong operational performance in the September quarter. The stock rose as much as 8.9 percent to Rs 66 per share on BSE.
The company’s revenue from operations increased 5.5 percent YoY to Rs 2,274.84 crore as compared with Rs 2,154.95 crore in the year-ago period.
However, it reported a 34.59 percent decline in its consolidated net profit at Rs 109.68 crore in Q2 versus a net profit of Rs 167.7 crore in the year-ago period.
The sentiment was also lifted as margins hit a four-year high of 15.6 percent in the quarter under review. The EBITDA also rose 21 percent YoY to Rs 366.69 crore because of the overall improvement in sales and cost-cutting measures.
“The company achieved higher sales on the back of economic recovery, more so in the automotive sector, which has taken place during the quarter. The company was well-positioned to take benefit of this emerging opportunity, and as a matter of fact, it could achieve healthy sales in the replacement market, doing better than the industry,” JK Tyre Chairman and Managing Director Raghupati Singhania said in a statement.
Singhania added that the profitability during the quarter improved significantly due to aggressive cost-cutting, more particularly fixed costs. The company could achieve savings in interest costs due to its ability to reduce its working capital requirements, it said.
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