JK Tyre & Industries rose 1.65% to Rs 58.55 after the company said its subsidiary, Cavendish Industries (CIL) recorded a net revenue of Rs 667 and profit before tax (PBT) of Rs 53 crore for the quarter.
CIL's EBIDTA stood at Rs 114 crore, which translated in an operating margin of 17%. CIL recorded its highest ever performance on back of higher capacity utilization of 84% with significant increase in truck/bus radial and 2-3-wheeler tyre sales. The aggressive focus on cost reduction particularly fixed costs and overall operating parameters helped improve its cash flows.
CIL houses 3 tyre business undertakings of Birla Tyres and was acquired by JK Tyre in 2016. The plants are located at Laksar (Haridwar) which manufacture a range of tyres, tubes and flaps. With this acquisition, JK Tyre now has 12 tyre plants-9 tyre plants in India & 3 in Mexico. CIL is a subsidiary of JK Tyre with majority shareholdings through direct holdings and the balance through its subsidiaries & JK Group companies.
On a consolidated basis, JK Tyre & Industries reported net loss of Rs 202.15 crore in Q1 June 2020 compared with net profit of Rs 15.68 crore in Q1 June 2019. Net sales tumbled 56.1% to Rs 1,130.80 crore in Q1 June 2020 over Q1 June 2019.
JK Tyre & Industries manufactures a wide range of automobile tires, tubes and flaps. The company also operates a chain of tire outlets across the country which sell the company's tires in addition to providing a range of automotive services, including wheel alignment and tire changing.
The scrip has spurted 85.87% from its 52-week low of Rs 31.50 hit on 24 March 2020.
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