JK Tyre & Industries Ltd. share price target

ICICI Securities Ltd | Retail Equity Research On a consolidated basis, JKTIL's revenues came in at | 2,152 crore (up 24.3% YoY), supported by volume growth (of 1-5% YoY in India & 25-30% YoY in its Mexico). Cavendish Industries (CIL) started contributing meaningfully, reporting revenue of | 400 crore EBITDA margins contracted 650 bps YoY & 515 bps QoQ to 9.3% below our estimate of 13.5%. Higher input cost (natural rubber price up 52.3% YoY & 22.5% QoQ to | 152/kg) impacted the gross margin...

ICICI Securities Ltd | Retail Equity Research JK Tyres & Industries (JKTIL) is one of the leading player in the M&HCV; truck bus radial (TBR) segment with market share >30%. In the passenger car radial (PCR) segment, it has a share of >12% in India. We remain positive on JKTIL's growth prospects as 1) the decline in import of Chinese tyre will further expand its market share, 2) the recent correction in natural rubber (NR) prices, coupled with cumulative price hike of ~10% in the last six months will support its margins, 3) higher utilisation at...

Given the situation of normal monsoon and higher discretionary spending, the overall outlook for Auto industry remains positive. Around 53% of the tyre industry's revenue comes from truck and bus tyres. With expected rise in the industry sales volumes and market leadership in the radial segment, JK Tyre is likely to benefit immensely. Further, the falling rubber prices will continue to provide cushion to company's operating margins.

ICICI Securities Ltd | Retail Equity Research On a consolidated basis, JK Tyres' (JKTIL) revenues came in at | 1,838 crore (up 14.6% YoY), which we believe would largely be volume driven. Gross revenues from India increased 25% YoY to | 1,903 crore (accounting for ~87% of consolidated revenue) while revenue from Mexican operation grew 12% YoY to | 279 crore EBITDA margins contracted 242 bps YoY & 570 bps QoQ to 14.4% below our estimate of 17%. Higher input cost (average natural rubber...

The company is a part of the century-old JK Organisation, one of India's leading private sector conglomerates with a multi-product, multi-location and multi-business operations. Company is the leader in Truck/Bus Radial Tyres segment with 34% domestic market share along with 30% market share in LCVs segment.

ICICI Securities Ltd | Retail Equity Research JK Tyres' (JKTIL) consolidated revenues were at | 1,918 crore (up 6.8% YoY). Gross revenues from India increased 7.2% YoY to | 1,906 crore while revenues from Mexico grew 6.4% YoY to | 309 crore. Other operating income came in higher (| 113 crore vs. | 19 crore YoY) due to a reversal in provision made due to CIL acquisition EBITDA margins expanded 284 bps YoY & 9 bps QoQ to 20.1% vs. our estimate of 15.7%. JKTIL posted higher interest expense (up...

JK Tyre is a part of the century-old JK Organisation, one of India's leading private sector conglomerates with a multi product, multi location and multi business operations. The company's manufacturing operations comprise 12 modern plants strategically located across the country Mysuru, Banmore, Kankroli, Chennai and Haridwar. The company has 141 JK Tyre selling points pan-India which service the growing needs of more than 4000 dealers. It is one of the India's leading tyre companies present in all tyre...

JK Tyres’ (JKTIL) consolidated revenues grew 0.2% YoY to | 1781 crore (vs. our estimate of | 1,759 crore). Revenues from domestic operations (India) declined 1.5% YoY to | 1,479 crore (volume growth of ~11% YoY; offset by ~13% decline in price) while revenues from Tornel were up 9.8% YoY to | 302 crore . EBITDA margins expanded 332 bps YoY & 463 bps QoQ to 20% vs. our estimate of 15%. Lower input cost was mainly due to an increase in inventory during Q1FY17 thereby expanding its gross margin.

Valuation: ICICI Securities Limited value JKTIL at 4x FY18E EV/EBITDA to arrive at a target price of | 110 (earlier | 90) with a HOLD recommendation on the stock. Any positive step by the government in terms of restricting Chinese tyres will be the key upside risk.

ICICI Securities Ltd | Retail Equity Research JK Tyres' (JKTIL) consolidated revenues declined 3.4% YoY to | 1749 crore (vs. our estimate of | 1,761 crore). Standalone revenue...