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Reliance Securities Report
JK Tyre Industries Ltd. has delivered a strong performance in Q2 FY23, with Ebitda margin coming in at 7.9% (down 187 basis points YoY/up 10 bps QoQ), broadly in line with our estimate of 8%, while adjusted profit after tax exceeded our estimate by 4%.
Higher margin performance in India as well Mexico business improved overall profitability. Its consolidated revenue grew by 26% YoY and 3% QoQ to Rs 37.6 billion, 4% above our estimate of Rs 36.1 billion, while Ebitda grew by 2% YoY and 4% QoQ to Rs 2.97 billion, 2.5% above our estimate of Rs 2.9 billion, due to better operating leverage and tight cost control despite higher raw material prices.
Ebit margin of India business contracted 142 bps YoY (up 21 bps YoY) to 4.9%, while for Mexico business it contracted by 66 bps YoY (15 bps QoQ) to 7.1%.
JK Tyre's reported profit after tax stood at Rs 513 million while adjusted profit after tax (adjusted for exceptional forex loss and VRS) stood at Rs 663 million (up 2% YoY and up 11% QoQ) as against our estimate of Rs 637 million.
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