JK Tyre & Industries Ltd. share price target

JK Tyre & Industries (JKT) has reported a strong operating performance in 1QFY19 with its consolidated revenue growing by 35% YoY and 7% QoQ to Rs24.4bn vs. our estimate of Rs21.3bn. Robust YoY performance is attributable to lower base in 1QFY18 owing to GST-led uncertainties. Consolidated EBITDA margin expanded by 1,340bps YoY (-108bps QoQ) to 13.3% aided by lower input cost and operating leverage. Healthy traction in 4W & 2W segments coupled with radialisation boosted JKT's quarterly performance. Staff cost remained under control owing to manpower rationalisation in domestic and overseas operations. It reported EBIDTA of Rs3.25bn as against operating loss of Rs11mn in 1QFY18. While reported PAT came...

Strong Quarter but too early to infer long term momentum JK Tyres (JKT) posted good set of growth numbers with a top line growth of 35% YoY. The growth was witnessed across segments, such as TBR, PC and light truck radials. 2/3-Wheeler space, which JKT entered through...

JK Tyre is a leading manufacturer of tyres in India with presence across commercial vehicles (CV's), passenger vehicles (PV's) and two-wheeler tyres. It commands a dominant 32% market share in the truck and bus radial (TBR) segment. The company derives ~87%/13% of its revenues from Indian/Mexican markets. EBITDA margin witnessed significant recovery with 512 bps YoY (439 bps QoQ) expansion...

On a consolidated basis, Q4FY18 revenues came in at | 2,284 crore (up 6.1% YoY), below our estimate of | 2,362 crore. Revenue from India (adjusting excise duty) increased ~10% YoY to | 2,239 crore (accounting for ~88% of consolidated revenue) while revenue from Mexican operation declined 12% YoY to | 296 crore. Revenue from Cavendish Industries (CIL) was at ~| 453 crore The EBITDA margin was at 14.4% (up 512 bps YoY, 439 bps QoQ) vs. our estimate of 10.3%. Absolute raw material cost remained flat...

JK Tyre & Industries (JKT) has reported a strong operating performance in 4QFY18 with its EBITDA growing by 65% YoY and 55% QoQ to Rs3.3bn. EBITDA margin expanded by 512bps YoY and 439bps QoQ to 14.4% primarily supported by lower input cost and healthy traction in 4W and 2W segments. While staff cost remained under control owing to manpower rationalisation measures in domestic and overseas operations, other expenses rose by 19% YoY, which impacted margin growth to certain extent. While revenue stood at Rs22.8bn (up 6% YoY and 8% QoQ), adj net profit zoomed to Rs1.5bn vs. Rs475mn and Rs154mn in 4QFY17 and 3QFY18, respectively. Higher non operating income (up 142% YoY and 830% QoQ) boosted net profit....

ICICI Securities Ltd | Retail Equity Research On a consolidated basis, revenues were at | 2,123 crore (up 15.5% YoY), vs. our estimate of | 2,066 crore. Revenues from India (adjusting excise duty) increased ~18% YoY to | 2,075 crore while revenue from Mexican operation declined 17% YoY to | 232 crore. Revenue from the Cavendish Industries (CIL) was at ~| 343 crore EBITDA margin came in at 10% (down 441 bps YoY, but up 51 bps QoQ). On a QoQ basis, raw material cost increased, resulting in gross...

JK Tyre & Industries (JKT) has reported a soft performance in 2QFY18 with its reported EBITDA declining by 46% YoY to Rs1.9bn. Its consolidated revenue grew by 7% YoY and 14% QoQ mainly aided by volume growth across product categories. Higher-than-estimated surge in raw material cost as % of sales led to dismal EBITDA margins of 9.5% as against 18.9% in 2QFY17. Net profit declined to Rs103mn from Rs1bn in 2QFY17. However, margin improved on QoQ basis owing to sequential decline in raw material prices and other expenditures. As per JKT, 2QFY18 performance is primarily driven by better demand in passenger segment (4W and 2W). Further, improvement in profitability of Mexican operations (JK Tornel) also aided performance. Looking...

On a consolidated basis, revenues came in at | 2,058 crore (up 7.3% YoY), below our estimate of | 2,093 crore. Gross revenue from India increased 5.2% YoY to | 2,005 crore while revenue from Mexican operation declined 18.5% YoY to | 252 crore We believe the India business would have been driven by both OEM (revival in demand) and replacement segment (partly due to restocking of tyres at dealer's end). Cavendish Industries posted revenue & EBIT (loss) of ~| 401 crore and ~| 15 crore, respectively EBITDA margin declined 1062 bps YoY but was up 958 bps QoQ to...

On a consolidated basis, JKTIL's revenues came in at | 1,807 crore (up 1.5% YoY). Gross revenue from India increased 2.8% YoY to | 1,828 crore while revenue from Mexico declined 2% YoY to | 285 crore. Domestic demand was mainly impacted by 1) higher import of Chinese radial tyres, 2) lower CV production due to de-stocking of inventory post transition to new emission norms and after 3) dealers...

JK Tyre is the major beneficiary of the radialisation trend gaining pace in the truck and bus segment. Radials now account for 44% share as against a meagre 6% share in FY09. With an entry into the lucrative 2W space through the acquisition of Cavendish Industries Limited (CIL), JK Tyre has become a full-range tyre player. India business is expected to grow at a CAGR of 10% over FY17-19E driven by enhanced capacities & acquisition of CIL. D/E ratio is expected to decline from 2.5x in FY17 to 1.6x by FY19E owing to strong free cash flow generation to the tune of Rs1747cr over FY18-19E....