-India’s JK Tyre & Industries Ltd on Monday reported its first profit increase in five quarters, driven by a rise in vehicle sales after a consumption tax cut boosted festive-season demand.
The company’s consolidated net profit rose to 2.21 billion rupees ($25.14 million), from 1.35 billion rupees a year ago.
Revenue for the quarter ended September 30, rose nearly 11% to 40.11 billion rupees.
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KEY CONTEXT
The goods and services tax (GST) cuts, announced in early September to spur consumer demand, helped revive auto sales and boosted demand for struggling tyremakers.
JK Tyre, which supplies to companies such as Maruti Suzuki and Tata Motors, makes more than 85% of its revenue from domestic sales.
Rival CEAT also posted a jump in quarterly profit last week.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
JK Tyre & 13.58 7.86 7.93 28.40 Buy 5 1.01 0.73
Industries
CEAT 20.83 9.22 13.78 31.18 Buy 17 1.00 0.72
Apollo Tyres 16.80 8.08 6.99 25.36 Buy 22 0.98 1.00
MRF 27.86 13.45 7.47 17.44 Hold 5 1.19 0.15
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY TO SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— ($1 = 87.8950 Indian rupees)
(Reporting by Komal Salecha in Bengaluru; Editing by Ronojoy Mazumdar and Harikrishnan Nair)
