InvestorQ : How did JK Tyres report such stellar numbers in the Dec-20 quarter?
Mary Joseph made post

How did JK Tyres report such stellar numbers in the Dec-20 quarter?

Arusha Ray answered.
11 months ago

J K Tyres third quarter PAT grew by a stupendous 18-fold to Rs.231 crore on the back of sharply higher sales revenues. JK Tyres reported 25.9% growth in revenues at Rs.2769 crore. The sales traction was visible in the domestic market as well as its predominant export market of Mexico. This was largely thanks to the sharp recovery in demand from the auto sector, which created a robust OEM market demand and also from the retreading space.

Operating profits were up 59.6% at Rs.607 crore. This growth was achieved due to much better sales traction without significant cost liability as fixed costs got better absorbed. This resulted in the OPM expanding from 17.29% in the Dec-19 quarter to 21.92% in the Dec-20 quarter. Despite a relatively higher tax outgo, PAT margins expanded from 0.53% in Dec-19 to 8.33% in Dec-20.

The performance was driven by increased demand for passenger and commercial vehicles as well as strong demand for farm tyres due to a strong Kharif season. The management of the company has confirmed that all the nine plants of the company were now operating at 96% capacity utilization levels which supported the operating profits in a big way.