JK Tyres launches €450m expansion plan following record results

New Delhi – JK Tyre & Industries has announced a phased capital expenditure plan of about $530 million (€454 million) to expand its truck & bus radial (TBR) and passenger car radial (PCR) tire capacities in India.

The proposed expansion will be directed towards TBR capacity at the group’s plants in Chennai and Vikrant, and PCR capacity at Chennai, JK Tyre announced 26 May.

The investment will increase the group's radial tire capacity in India by "around 24% over the next few years,” said the Indian tire maker.

The projects will be funded through a mix of internal accruals and debt.

Commenting on the development, chairman and managing director Dr Raghupati Singhania said the group was undertaking one of its "largest capex programmes in recent years" as “capacities across segments are operating at high utilisation levels and demand visibility remains strong.”

The expansion, he said, has been approved in view of growth momentum and expected demand pick-up.

The move, Singhania said, and will help JK Tyre build additional “manufacturing headroom” while strengthening its position across key radial tire categories.

The announcement comes on the back of a strong financial performance in the year ended 31 March, during which JK Tyre reported record consolidated revenue.

The group reported total consolidated revenue of INR42 billion (€380 million) in the fourth quarter of the year, up 12% year-on-year while earnings (EBITDA) for the quarter grew 42% to $INR5.4 billion.

For the full year, sales grew 11% year-on-year to INR164 billion while earnings increased 25% to INR21 billion.

Describing it a “landmark year for JK Tyre,” Singhania said the fiscal year saw the group deliver “record volumes across segments, [and] attaining the highest ever annual consolidated revenue.”

Singhania said revenue growth was driven by stronger demand conditions, including GST and personal tax reforms, softer interest rates, improved economic activity and seasonal demand.

He added that the Indian operations remained the main growth driver, with sales volumes rising 21% year-on-year, supported by a 42% increase in OE demand.

Export performance remained steady despite geopolitical uncertainty.

The group said improved profitability in final quarter was driven by higher volumes, a better product mix and cost optimisation measures.

Mexican subsidiary JK Tornel also contributed to consolidated results.

JK Tyre operates 11 manufacturing facilities, nine in India and two in Mexico, and has an overall capacity to produce 37 million units of tire per year.