JK Tyre & Industries Q1 FY'25 Earnings Conference Call Summary
Key Financial Highlights
• Net Profit: Increased by 33% year-on-year to INR 212 crore.
• Consolidated Revenues: Reported at INR 3,655 crore.
• EBITDA Margins: Improved to 14.1% from 12.5% year-over-year.
• EBITDA Growth: Increased by 11% to INR 516 crore.
• Cash Profit: Rose by 18% to INR 403 crore.
• Earnings Per Share: Improved to INR 7.62.
• Exports: Grew by 9% to INR 637 crore.
Market Overview
• Automotive Market Growth: Modest growth in commercial and passenger vehicle segments; two-wheeler segment rebounded due to rural demand.
• Electric Vehicle Commitment: Significant market presence in EV buses; expanding capacity for various tyre categories.
Strategic Focus
• Premiumization and Pricing: Emphasis on brand strength and pricing strategies to manage raw material costs.
• Digital Presence and Sustainability: Ongoing efforts to enhance digital initiatives and sustainability practices.
Subsidiary Performance
• JK Tornel in Mexico: Faced challenges due to local elections and holidays; expected stabilization in the coming year.
• Cavendish Industries: Contributed significantly to revenue and profitability.
Capacity and Inventory Management
• Capacity Utilization: Exceeded 80%, with radials over 90%.
• Inventory Strategy: Collaborating with suppliers to maintain production levels; managing inventory to mitigate raw material impacts.
Market Trends and Outlook
• Premiumization Trends: Premium passenger car radials (PCR) mix increased to nearly 50%; truck radials (TBR) reached 92%.
• Original Equipment Demand: Anticipated stronger demand in the latter half of the financial year due to government initiatives and favorable conditions.
Debt and Capital Expenditure
• Debt Position: Slight increase in gross debt; optimistic about managing working capital.
• Capital Expenditure: Completion of an INR 800 crore project; ongoing expansions totaling INR 1,400 crores.
Revenue Mix
• Revenue Breakdown: Replacement market (60%), OEM (25%), exports (15%).
• Product Line Contribution: Truck and bus tyres (60%), passenger line radials (25%), others (15%).
Conclusion
• Management expressed optimism for revenue growth in mid- to high single digits for the year, with positive expectations for PCR replacement demand.

Key Highlights
• Record Achievements:
• Revenues surpassed Rs. 15,000 crore.
• Net profits tripled.
• 30 millionth truck bus radial tyre rolled out.
• Strong performance in mobility solutions segment.
Financial Performance
• Q4 FY24 Results:
• Revenues: Rs. 3,714 crore (28% YoY growth).
• Improved operating margins.
• Domestic volume growth: 6%.
• Export volumes increased by 43% in Q4.
• FY24 Consolidated Results:
• Revenues: INR 15,046 crore (2.5% increase).
• EBITDA: INR 2,122 crore (59% growth).
• Profit after tax: INR 811 crore.
• Capacity utilization: 89% in Q4.
Future Outlook
• Sales Growth Target:
• Aim for 8-10% growth in FY25 through volume and pricing strategies.
• Expansion of exclusive brand stores and engagement with fleet operators.
• Cost Management:
• Price increases and operational efficiencies to manage raw material costs.
• Anticipated 1.5% to 2% price hikes already implemented.
Market Insights
• Commercial Vehicle Market:
• Flat demand expected in H1, improvement anticipated in H2.
• Focus on premiumization to enhance profitability.
Marketing and Branding
• New Campaign:
• "Desh Ka Tyre" aimed at improving brand perception and expanding market share, especially in the SUV segment.
• Brand Visibility Concerns:
• Emphasis on motorsports and social media for branding over celebrity endorsements.
Conclusion
• Management expressed confidence in maintaining profitability and addressing cost pressures through strategic pricing and capacity management.

JK Tyre & Industries Ltd. Q1 FY2024 Earnings Conference Call Summary
Financial Performance
• Consolidated Net Revenues: Increased by 2% to Rs. 3,729 crore.
• Operating Profit: Surged 60% to Rs. 465 crore; operating margin expanded by 450 basis points.
• Exports: Rose 23% to Rs. 587 crore, reflecting improved global conditions.
Market Insights
• Domestic Market: Strong demand in replacement volumes; temporary decline in OEM sales due to pre-buying for new emission norms.
• International Operations: JK Tornel, Mexico, reported a 2% turnover increase to Rs. 683 crore; positive economic outlook in Mexico.
Strategic Focus
• Future Growth: Emphasis on innovation, sustainability, and digital transformation.
• Carbon Emission Reduction: Commitment to enhancing customer experience and reducing environmental impact.
Capacity and Expansion
• Capacity Utilization: All plants operating at approximately 85% capacity.
• Capital Expenditure: Plans for Rs. 1,100 crore in growth capex and Rs. 250 crore for normal expenses.
Challenges and Responses
• Increased Expenses: Notable rise in power, fuel, logistics, and sales promotion costs; ongoing cost control measures in place.
• Competition: Addressed concerns about increased competition from China; Indian products remain competitive.
Growth Projections
• Sales Growth Targets: Forecasting double-digit growth for commercial vehicles and high single-digit growth for passenger vehicles.
• Debt Reduction: Aiming to reduce long-term debt by 25% by FY26.
Raw Material and Pricing
• Raw Material Stability: Prices for natural rubber and carbon black have remained stable; 5% price increase in India.
• Green Tyre Initiative: Currently in testing, expected to be priced higher than standard tyres.
Conclusion
• Positive Outlook: Management anticipates favorable macroeconomic factors supporting growth in FY24.