JK Tyre & Industries Ltd on Friday reported a sharp 71.3 per cent decline in consolidated profit after tax to Rs 65.11 crore for the July-September quarter despite a double-digit growth in revenue.
The tyre maker's consolidated profit after tax was Rs 226.89 crore in the year-ago period, the company said in a regulatory filing.
Its revenue from operations grew 20.7 per cent to Rs 4,840.73 crore from Rs 4,011.31 crore a year ago.
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The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter were Rs 343 crore against Rs 536 crore a year earlier.
Its EBITDA margin stood at 7.1 per cent compared to 13.3 per cent in the same quarter of the preceding fiscal, JK Tyre said in a release.
JK Tyre Chairman and Managing Director Raghupati Singhania said the operating environment remains challenging due to geopolitical tensions in West Asia.
According to him, input costs were "persistently higher", and there were supply chain constraints, including container freight rates that are significantly above historical levels.
The company's total expense climbed 27.7 per cent to Rs 4,744.08 crore from Rs 3,714.05 crore in the year-ago period as cost of materials consumed jumped 38.7 per cent to Rs 3,392.71 crore from Rs 2,445.45 crore.
Anshuman Singhania, who is also the company's managing director, said that the cost of raw material has increased 9 per cent in the second quarter compared to the first quarter, while the cumulative increase over the last six months has been around 30 per cent.
When asked about price hikes, he said: "We have increased prices by 7 per cent sequentially in the second quarter, and another 5 per cent increase was taken in the first quarter. So, we have increased 11-12 per cent on a six-month basis".
However, he noted that the consolidated revenue for the quarter was the highest-ever.
"India business has picked up significant growth momentum post GST 2.0, anchoring an increase in OE market by 65 per cent, leading to 32 per cent growth in domestic sales, on a year-on-year basis. This has been delivered through disciplined execution across markets and segments," he said.
The company remains optimistic about the demand backed by healthy customer traction visible across segments, he added.
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