Shares of JK Tyre & Industries declined almost 3% after the company reported a sharp fall in profits for the July-September quarter, marking its first quarterly profit decline in two years. The tyre maker’s consolidated net profit dropped by 44% year-on-year to ₹135 crore, primarily due to weak demand from car, bus, and truck manufacturers.
Revenue for the quarter also saw a decrease, falling 7% to ₹3,622 crore, following a revenue drop in the April-June period – the first decline in four years.
Key Factors Affecting Performance:
- Demand Slowdown: Domestic sales of buses and trucks fell by 12% in Q2, while car sales witnessed their first decline in more than two years. With over 80% of its revenue reliant on these sectors, JK Tyre’s earnings were significantly impacted.
- Rising Rubber Costs: The Indian tyre industry is grappling with a 20% rise in domestic rubber prices driven by global supply shortages, which has put additional pressure on profit margins.
Other major players in the sector, including CEAT and Goodyear India, have also reported declines in quarterly profits, reflecting an industry-wide challenge. MRF is set to report its results later this week, and industry watchers will be keen to see if similar trends persist.
As of 10:48 am, JK Tyre & Industries shares were trading 2.30% lower at ₹380.20 on the NSE.
