JK Tyres Sales Up but Profits Down in Q1, 2010
JK Tyre & Industries, manufacturer of the JK Tyre, Vikrant and Tornel brands of tyre, has reported a 32 per cent increase in sales in the first quarter of the Indian financial year. In the three months to June 30, 2010, the company achieved a turnover of RS 12,729 million (£171.9 million) and an operating profit of Rs 730 million (£9.9 million). Net profit for the quarter was Rs 195.3 million (£2.6 million), down 52.1 per cent per cent year-on year.
“JK Tyre has recorded 32 per cent increase in sales turnover in the first quarter of the current year,” said JK Tyre vice chairman and managing director Dr. Raghupati Singhania. “It was a very challenging quarter as the natural rubber prices are increasing unabated. The tyre prices could not keep pace with the cost increases. This has affected profitability for the quarter”.
“Our expansions are well on course,” Dr. Singhania added. “OTR Tyre and Car radial expansion projects shall be commissioned during the current quarter. TBR capacity is being further expanded from eight to ten lakh (six hundred thousand to a million) tyres per annum at the existing location at Mysore. This capacity expansion should be completed early next year. Green Site project for two lakh (two hundred thousand) truck and bus radials and 25 lakh (2.5 million) passenger car tyres near Chennai is also progressing well.” [The] automotive industry in India is growing rapidly. In addition, with the economy expected to grow by 8.5 – 9 per cent in the current year, the demand for tyres will also grow. With the completion of our expansion projects, this will further cement our leadership position in the growing markets.”