Market factors drive JK Tyre into the red
JK Tyre of India has reported a consolidated net loss of Rs 117.21 crore for Q1 that ended June 30 compared to a net profit of Rs 100.47 crore for the same period of the previous fiscal year.
Total income declined to Rs 1,942.86 during the first quarter compared to Rs 1,957.76 crore in the previous comparable period, JK Tyre and Industries said in a regulatory filing. On a standalone basis, the company reported a net loss of Rs 65.86 crore Q1 compared to a net profit of Rs 100.85 crore previously.
JK Tyre and Industries chairman and managing director Raghupati Singhania said: “The raw material costs increased by about 30% over the corresponding quarter. Such steep increase in prices of raw materials without commensurate increase in selling prices dented margins.” The executive added that unabated imports of cheap Chinese radial tyres impacted both volumes and prices of truck and bus radial tyres.
The company was also affected by a cut in production by commercial vehicle manufacturers to destock inventories and transition to new emission norms during the period under review. In the replacement market, dealers were reluctant to acquire tyres before the Goods and Service Tax (GST) introduction in July, Singhania said.