JK Tyre & Industries Ltd.'s profit for the quarter ended March plunged as a spate of headwinds hurt its operating margin.
Net profit fell 76.9 percent over last year to Rs 33.6 crore, according to its exchange filing. Revenue rose 18.5 percent year-on-year to Rs 2,706 crore.
Highlights (YoY)
- Operating profit declined 20.7 percent to Rs 261.1 crore.
- Operating margin narrowed 480 basis points to 9.6 percent.
- Finance costs increased 23 percent to Rs 141.5 crore.
Rising prices of rubber and crude oil derivatives—major raw materials that comprise over 60 percent of a tyremaker's input costs—hurt the company's margin.
“The economy was down, liquidity was low and all our customers were suspending buying in Q4,” Arun Bajoria, director and president of international operations, JK Tyre, told BloombergQuint in an interaction. He also said the company recording its highest sales in FY19 was a silver lining.
“This is the first time that JK tyre has achieved sales of Rs 10,000-crore plus,” Bajoria said. This was done because the company, said Bajoria, was able to pass on price hikes, increase volume growth and exports.
Watch the full interview here:
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