JK Tyre Shares Rally 14% After Net Profit Rises 398% In Q2; Details

JK Tyre Shares At One-Year High: JK Tyre shares jumped 14 per cent on the company’s strong operational performance in the September quarter (Q2FY24) and surpassed its previous high of Rs 344 touched on October 17. At this price, the multibagger scrip has gained 147.83 per cent from its one-year low of Rs 141.65, a level seen on March 20 this year.

The tyremaker’s consolidated net profit soared five-fold to Rs 249 crore during the September quarter as against Rs 50 crore in the year-ago period. Net revenues in the second-quarter increased to Rs 3,905 crore from Rs 3,764 crore in the corresponding period last year.

Sensing the market demand, the company announced a fresh capex of Rs 1,025 crore to be commissioned by October 2025.

The above project is proposed to be funded by way of equity/internal accruals and debt. The board also approved fund raising up to Rs 500 crore by way of qualified institutions placement (QIP) or other permissible mode.

JK Tyre said the lndian auto industry is witnessing good growth, which is expected to continue for some time. This gives an opportunity to increase its market presence further in the automotive tyre market, the company said.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 95.7 per cent YoY at Rs 589 crore with corresponding EBITDA margin at 15.1 per cent, up 718 bps YoY.

Consolidated turnover were up 4 per cent year-on-year (YoY) at Rs 3,905 crore.

The sustained thrust on larger market presence boost volumes across segments and product categories. The strategic focus on enrichment of product mix across the entire Radial range, PCR/LTR/TBR has had positive outcome, the management said.

The company posted healthy cash flow from operating activities in H1FY24 at Rs 1065 crore with consequent free cash flow and reduction in gross debt pegged at around Rs 700 crore and Rs 450 crore respectively.

On technical setup, the counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter’s 14-day relative strength index (RSI) came at 68.67. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 29.49 against a price-to-book (P/B) value of 2.63.

The scrip has an analyst target price of Rs 255, Trendlyne data showed, suggesting a potential downside of 23 per cent in a year. It has a one-year beta of 1.19, indicating high volatility on the counter.

Meanwhile, Indian equity benchmarks rose sharply in today’s deals, led by gains across all sectors.

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