JK Tyre & Industries’ Q2 results for FY24 revealed a 44% year-on-year (YoY) drop in net profit, reaching ₹135 crore, compared to ₹242 crore in the same period last year. This decline was primarily driven by lower demand across key segments and an increase in natural rubber prices, impacting profitability.
JK Tyre & Industries Q2 Results: Notable Decline in Net Profit and Revenue Amid Challenging Market Conditions
As per cnbctv18 Leading tyre manufacturer JK Tyre & Industries Ltd announced its Q2 FY24 results on November 5, 2024, revealing a significant decline in both net profit and revenue compared to the previous year. For the quarter ending September 30, 2024, the company reported a 44.2% year-on-year (YoY) decrease in net profit, totaling ₹135 crore, down from ₹242 crore during the same period last year. This substantial drop underscores the challenges posed by weakened demand and escalating raw material costs, which have adversely affected the company’s financial performance.
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Additionally, revenue from operations experienced a downturn, decreasing by 7.1% to ₹3,621.6 crore, compared to ₹3,897.5 crore in Q2 of the previous fiscal year. Despite these challenging conditions, JK Tyre managed to maintain its strong presence in the passenger car and commercial vehicle markets, while also capitalizing on growth in exports to mitigate weaknesses in the domestic market.
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Financial Performance Overview
Net Profit Drops 44.2% YoY
- Q2 FY24 Net Profit: ₹135 crore
- Q2 FY23 Net Profit: ₹242 crore
- YoY Decline: 44.2%
In Q2 FY24, JK Tyre’s net profit declined by 44.2% YoY, with earnings shrinking from ₹242 crore to ₹135 crore due to weakened domestic demand and higher operating expenses.
Revenue from Operations Decreases 7.1%
- Q2 FY24 Revenue: ₹3,621.6 crore
- Q2 FY23 Revenue: ₹3,897.5 crore
- YoY Decline: 7.1%
Revenue from operations stood at ₹3,621.6 crore, down 7.1% YoY, reflecting a slowdown in the tyre industry. Lower domestic demand, attributed to political uncertainties around the general election and adverse weather conditions, contributed to this revenue dip.
EBITDA Margin Contracts by 3.5%
- Q2 FY24 EBITDA: ₹421.3 crore
- Q2 FY23 EBITDA: ₹589 crore
- EBITDA Margin: 11.6% (down from 15.1%)
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a YoY drop of 28.5% to ₹421.3 crore, resulting in a reduced EBITDA margin of 11.6% versus 15.1% in Q2 FY23. This margin contraction primarily stemmed from increased natural rubber costs, which surged due to supply chain disruptions and adverse weather conditions.
JK Tyre’s Strategic Outlook: Resilience in the Passenger and Commercial Vehicle Segments
In his statement, Dr. Raghupati Singhania, Chairman and Managing Director, emphasized JK Tyre’s resilience in a challenging quarter. The company successfully maintained its presence in the passenger car market despite weakened demand. In the commercial vehicle segment, the combination of election-related economic slackening and intense rainfall limited revenue potential, as both factors impacted infrastructure-related activities and demand for tyres.
Dr. Singhania also highlighted JK Tyre’s market leadership in the EV bus segment. This segment has shown promising growth as the demand for environmentally-friendly commercial transport solutions continues to rise.
JK Tyre & Industries Q2 Results: Resilience in Key Segments
In light of the Q2 FY24 results, Dr. Raghupati Singhania, Chairman and Managing Director of JK Tyre & Industries, highlighted the company’s resilience despite challenging conditions. The company maintained its position in the passenger car market, even as demand weakened.
The commercial vehicle segment faced challenges from election-related economic slackening and heavy rainfall, limiting revenue potential. However, Dr. Singhania emphasized JK Tyre’s leadership in the growing EV bus segment, driven by rising demand for environmentally-friendly transport solutions.
Overall, JK Tyre’s strategic focus, as reflected in its Q2 results, showcases its adaptability and potential for future growth in both established and emerging markets.
JK Tyre & Industries Q2 Results: Net Profit Declines 44% YoY Amid Weaker Demand & Rising Rubber Costs
News Source: Economic Time
Meta Description: JK Tyre & Industries reported a 44% YoY drop in net profit for Q2 FY24, impacted by lower demand and rising natural rubber prices. Revenue declined 7.1% to ₹3,621.6 crore as both passenger and commercial segments faced challenges. Explore the full report.
JK Tyre & Industries Q2 FY24 Performance: Key Highlights and Financial Analysis
Leading tyre manufacturer JK Tyre & Industries Ltd announced its Q2 FY24 financial results on November 5, 2024, detailing a significant decline in net profit and revenue compared to the previous year. The company’s net profit fell by 44.2% year-on-year (YoY) to ₹135 crore for the quarter ending September 30, 2024. In the same period last year, the tyre giant had reported a net profit of ₹242 crore, marking a substantial drop due to weaker demand and rising raw material costs.
Revenue from operations also showed a downward trend, decreasing by 7.1% to ₹3,621.6 crore, down from ₹3,897.5 crore in the second quarter of the previous fiscal year. Despite a challenging environment, JK Tyre maintained its stronghold in the passenger car and commercial vehicle markets and leveraged growth in exports to counter domestic weaknesses.
Financial Performance Overview
Net Profit Drops 44.2% YoY
- Q2 FY24 Net Profit: ₹135 crore
- Q2 FY23 Net Profit: ₹242 crore
- YoY Decline: 44.2%
In Q2 FY24, JK Tyre’s net profit declined by 44.2% YoY, with earnings shrinking from ₹242 crore to ₹135 crore due to weakened domestic demand and higher operating expenses.
Revenue from Operations Decreases 7.1%
- Q2 FY24 Revenue: ₹3,621.6 crore
- Q2 FY23 Revenue: ₹3,897.5 crore
- YoY Decline: 7.1%
Revenue from operations stood at ₹3,621.6 crore, down 7.1% YoY, reflecting a slowdown in the tyre industry. Lower domestic demand, attributed to political uncertainties around the general election and adverse weather conditions, contributed to this revenue dip.
EBITDA Margin Contracts by 3.5%
- Q2 FY24 EBITDA: ₹421.3 crore
- Q2 FY23 EBITDA: ₹589 crore
- EBITDA Margin: 11.6% (down from 15.1%)
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a YoY drop of 28.5% to ₹421.3 crore, resulting in a reduced EBITDA margin of 11.6% versus 15.1% in Q2 FY23. This margin contraction primarily stemmed from increased natural rubber costs, which surged due to supply chain disruptions and adverse weather conditions.
JK Tyre’s Strategic Outlook: Resilience in the Passenger and Commercial Vehicle Segments
In his statement, Dr. Raghupati Singhania, Chairman and Managing Director, emphasized JK Tyre’s resilience in a challenging quarter. The company successfully maintained its presence in the passenger car market despite weakened demand. In the commercial vehicle segment, the combination of election-related economic slackening and intense rainfall limited revenue potential, as both factors impacted infrastructure-related activities and demand for tyres.
Dr. Singhania also highlighted JK Tyre’s market leadership in the EV bus segment. This segment has shown promising growth as the demand for environmentally-friendly commercial transport solutions continues to rise.
Export Performance Offsets Domestic Slowdown
To balance the domestic slowdown, JK Tyre saw notable growth in export markets, capitalizing on international demand for high-quality, durable tyres. Improved export sales helped cushion the financial impact of slower domestic demand.
Rising Rubber Costs Impact Profitability
In Q2 FY24, JK Tyre faced rising costs of natural rubber, a key raw material in tyre manufacturing. The increase in rubber prices, driven by supply chain disruptions and extreme weather, eroded profit margins. Despite these challenges, JK Tyre continued to optimize production processes to ensure cost-effective operations while meeting market demands.
JK Tyre’s Stock Performance on BSE
After announcing its Q2 results post-market hours, shares of JK Tyre and Industries Ltd closed at ₹388, showing a minor decline of ₹2.70 or 0.69%. Market analysts remain attentive to JK Tyre’s strategies to navigate challenges, particularly the impact of natural rubber prices and fluctuating demand on future financial performance.
FAQs on JK Tyre & Industries Q2 FY24 Results
- What is JK Tyre’s net profit for Q2 FY24?
- JK Tyre reported a net profit of ₹135 crore for Q2 FY24, marking a 44.2% decline from ₹242 crore in Q2 FY23.
- How much did JK Tyre’s revenue from operations decrease YoY?
- Revenue from operations fell 7.1% YoY to ₹3,621.6 crore in Q2 FY24 from ₹3,897.5 crore in the previous year.
- What caused the decrease in JK Tyre’s profit margins?
- Profit margins declined due to higher costs of natural rubber, influenced by adverse weather conditions and supply chain issues.
- How did JK Tyre’s EBITDA margin change in Q2 FY24?
- The EBITDA margin fell from 15.1% in Q2 FY23 to 11.6% in Q2 FY24.
- Why did JK Tyre’s revenue decrease in Q2 FY24?
- Revenue declined due to lower demand in both the passenger and commercial vehicle segments, partially affected by general elections and heavy rainfall.
- Did JK Tyre manage to maintain its position in the market?
- Yes, JK Tyre retained strong market positions in the passenger car and EV bus segments.
- How did JK Tyre’s stock perform after the Q2 FY24 results?
- Shares of JK Tyre closed at ₹388 on the BSE, down by ₹2.70 or 0.69% post-results announcement.
- What challenges did JK Tyre face in Q2 FY24?
- JK Tyre faced rising natural rubber costs, weakened domestic demand, and economic uncertainties due to elections and extreme weather.
- Did JK Tyre see any growth in exports?
- Yes, JK Tyre achieved growth in exports, which partially offset the decline in domestic demand.
- What is JK Tyre’s outlook for the upcoming quarters?
- JK Tyre plans to continue focusing on its market leadership in various segments and managing costs amid rising raw material prices and demand fluctuations.
