JK Tyre & Industries is banking on the demand for premium products to drive the next phase of growth. In fact, the company has already earmarked about Rs 1,400 crore investment of which Rs 1,000 crore will go towards brownfield expansion of which majority will be towards passenger vehicle tyres while the remaining will be towards truck & bus radials.
In Q3 FY2024, the company clocked revenue of Rs 3,700 crore, up 2 percent YoY, and net profit of Rs 227 crore, up 240 percent YoY respectively. Notably, the company reduced its net debt by 24 percent to Rs 3,456 crore from the levels recorded in March 2023. And it is confident that Q4 will further drive growth.
Anuj Kathuria, President – India, JK Tyre & Industries told Financial Express Online, that in January the passenger vehicle segment saw sales of around 400,000 tyre units, of which almost 60 percent of sales came from the SUV segment. This is an area where the demand for premium products and higher tyre sizes will be an area of opportunity for the company.
“Premiumisation doesn’t mean that these are not mass market products. These (products) are also mass market like the entire passenger segment is moving towards higher rim sizes (15 inch and above). We are getting a lot of OE fitments (business) and therefore the overall aftermarket rub-off effect is also there,” he added.
Responding to plans for new product launches, while Kathuria did not reveal the exact number and line-up, he said that JK Tyre & Industries will have a slew of launches for both TBR (truck & bus radials) and passenger vehicle segment, “especially on the higher-end sizes 18-inch and even beyond that getting into 19-20 inch.”
It maybe, recalled that in 2019, JK Tyre & Industries had acquired Treel, a start-up working on tyre pressure monitoring system (TPMS), and entered the smart tyre space. The move was aimed at providing customers access to one of the crucial data for making their vehicle journeys safer. Not many realise, but the temperature and pressure in tyre not only affects the efficiency of the vehicle but also safety.
“Most of the road accidents that happen are a consequence of either low pressure in tyres or sometimes overheated tyres. Rather than getting into such a situation these smart tyres give an alert well in advance so that corrective measures can be taken,” added Kathuria. Interestingly, he further revealed that at present, these smart tyres already account for almost 10 percent of its total passenger car tyre sales and are growing.”
The company also plans to “add 100 brand shops (exclusive JK Tyre outlets) every year, at least for the next couple of years,” said Kathuria. This will be in addition to the over 6,000 plus dealerships and 750 brand shops existing at present.
