Buoyed by favourable raw material prices, deeper market penetration and better product mix, JK Tyre & Industries today reported a standalone net profit of Rs 21.14 crore for the quarter ended December 31, 2012.
The company, which had posted a net loss of Rs 21.31 crore in the year-ago period, also said it will be investing around Rs 240 crore in expanding trye production capacity at its domestic plants and Mexico in the next 15 months.
The standalone total income during the third quarter of this fiscal went down by 7.35 per cent to Rs 1,281.49 crore from Rs 1,383.19 crore in the year-ago period, the company said.
Commenting on the results, JK Tyre & Industries Vice Chairman and MD Raghupati Singhania said: "It was indeed a challenging quarter for the auto industry with depressed demand, particularly by the OEMs, which impacted demand for tyres".
The company's better profitability was due to deeper penetration in the market place, particularly in truck and bus radials, despite the overall slowdown, he added.
"The stable raw material prices during the quarter helped in containing costs. Additional radial tyre capacities recently created, both for truck/bus as well as passenger tyres will further cement JK Tyre's radial leadership position," Singhania said.
Commenting on the company's expansion plans, JK Tyre & Industries President and Director Arun Bajoria said: "The board today approved an investment of Rs 160 crore for expanding our overall domestic tyre production capacity across different segments".
The investments, to be carried out over the next 15 months, will see the company add 10 lakh tyres per annum to the existing capacity of 13 million per year.
"Out of the total investment, Rs 60 crore will be immediately invested at our Chennai plant for increasing our radial passenger car tyre capacity by five lakh tyres a year," Bajoria told reporters here.
The remaining Rs 100 crore will be used for increasing tractor and small commercial vehicles tyre capacities across other plants in India. JK Tyre & Industries has a total of nine plants, six in India and three in Mexico.
On the expansion for JK Tornel, Mexico, Bajoria said the company will be investing