JK Tyre & Industries reported a four-fold surge year-on-year (y-o-y) in its consolidated net profit to Rs 153.87 crore in Q1FY24, bolstered by improved operational efficiencies and a consistent sequential rise in top line. Additionally, an exceptional item of Rs 34.5 crore in Q1FY23 contributed to the profit increase. The company's revenue witnessed a 2 per cent y-o-y growth, reaching Rs 3718 crore.
The significant profit after tax (PAT) increase is credited to a superior product mix, operational efficiencies, product premiumisation, digitalisation, and cost optimisation. Stable raw material prices further supported these factors, the company stated on Friday. On a sequential basis, the company's revenue grew by 2.36 per cent, while PAT growth stood at 42 per cent.
The company succeeded in depleting its previously held high-priced inventory during the June quarter, thanks to steady raw material costs. This allowed the company to utilise the current raw material inventory at favourable prices. The company also reported a 3 per cent volume growth over the previous quarter.
Reflecting on the results, Raghupati Singhania, chairman and managing director (CMD), said, "The financial year 2024 has started on a positive note in terms of better profitability, a result of our continued focus on premiumisation of the product mix, and indeed aided by stable input costs. We are witnessing buoyancy in demand in the replacement and OEM segments across product categories. We also anticipate export demand to revive in the coming months."
Recently, the company disclosed a capital expenditure plan amounting to approximately Rs 1,100 crores. JK Tyre & Industries has set a target to reduce its net long-term borrowings by 25 per cent by FY26, accounting for new loans anticipated for their ongoing projects. The company's share price rose by 6.73 per cent, ending the day's trade at Rs 283 per share on the BSE.