JK Tyre & Industries Ltd: Post-Earnings Market Movement

JK Tyre & Industries Ltd: Post-Earnings Market Movement

VoM News Desk | February 7, 2024 | 12:55 PM IST | Breaking News | Follow on Google News

JK Tyre & Industries Ltd: Post-Earnings Market Movement

JK Tyre & Industries Ltd: Post-Earnings Market Movement

JK Tyre & Industries Ltd witnessed a more than 5% decline in its share price during Wednesday’s session, attributed to profit booking following a substantial upward trend. The stock had surged over 80% in the last six months. Analysts highlight that the current correction is part of a natural consolidation phase after reaching around ₹550, following a strong rally from mid-January when the stock was at approximately ₹400. Despite the recent dip, the overall trend remains positive, presenting a potential buying opportunity.

Impressive Q3 Results

For Q3FY24, JK Tyre & Industries reported robust financials, with a consolidated net profit surge of 240% YoY, reaching ₹227 crore compared to ₹67 crore in Q3FY23. The company’s revenue from operations rose to ₹3,688 crore from ₹3,613 crore YoY. Notably, the earnings before interest, taxes, depreciation, and amortisation (EBIDTA) stood at ₹563 crore, marking an impressive 61% YoY increase. The company’s gross margin performance outperformed expectations and surpassed key peers in the listed space.

Positive Outlook and Strategic Dividend

JK Tyre’s management expressed commitment to achieving profitable growth through product premiumisation, volume expansion, and optimizing the product mix. The demand outlook remains optimistic, supported by strong economic activity and positive consumer sentiments across various product categories. The board approved an interim dividend of Re 1 per equity share (50%) with a face value of ₹2 per share, based on the company’s performance. The net debt has decreased by 24% from March 2023 levels.

JK Tyre Chairman and Managing Director, Raghupati Singhania, highlighted the positive contributions to total sales and profitability from the company’s subsidiaries in Mexico, JK Tornel, and Cavendish Industries Ltd. (CIL).

VoM News Desk

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