JK Tyre and Industries Ltd shares dived over 14% in intraday trade on August 2 after the company’s consolidated net profit dropped by a sharp 75% to Rs 16 crore in the first quarter ended June (Q1) compared with a profit of Rs 64 crore in the year-ago quarter.
At 12.36 pm, shares of JK Tyre and Industries were trading at Rs 66.15 apiece, down 7%, on BSE after hitting an intra-day low of Rs 60.95. The stock has corrected by a massive 47% in the last one year.
Raghupati Singhania, chairman and managing director, JK Tyre, said: “It was a difficult quarter for the auto industry, which is passing through challenging times. The quarter witnessed considerable de-growth in auto sales. Most of the manufacturers have reported heavy reduction in their sales volumes.”
He added: “Despite this, the company has recorded 18% growth in the overall replacement market which could partly off-set lower sales in the OEM (original equipment manufacturer) segment and exports growth of over 50% over the corresponding period with an overall volume growth of 10%.”
JK Tyre said it expected the economy to improve from the second half of the current fiscal year, as volumes are expected to pick up, thereby improving the profitability of the company.
JK Tyre’s revenue from operations during the quarter inched up 6% to Rs 2,575 crore compared with Rs 2,430 crore in the same quarter the previous year.
The company’s performance was weak at the operating level, with Ebitda (earnings before interest, tax, depreciation and amortization) margins contracting 400 basis points to 9.3% in the June quarter from 13.3% in the year-ago quarter.
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