(Corrects date)
(Reuters) -India’s JK Tyre reported a drop in fourth-quarter profit on Tuesday, hurt by tepid demand in the truck and bus segment.
The company’s consolidated net profit dropped 43% to 970.4 million rupees ($11.3 million), from 1.69 billion rupees a year before.
Quarterly revenue rose 1.6% to 37.59 billion rupees, likely helped by price hikes.
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KEY CONTEXT
Indian tyre makers are facing sluggish auto sales and are largely depending on replacement demand to drive volumes.
Overall, automobile sales grew 1.8% in the January-March period, down sharply from the 20% growth seen in the year before.
JK Tyre, which supplies to the likes of Maruti Suzuki and Tata Motors, derives about a quarter of its revenues from sales to automakers and two-thirds from the tyre replacement market.
Rivals Apollo Tyres and CEAT also reported lower quarterly profits.
PEER COMPARISON
Estimates (next 12 Analysts’ sentiment
months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div
TDA growth (%) growth rating* analyst price yield
(%) s target** (%)
JK Tyre 12.76 7.34 6.87 32.14 Buy 5 0.87 1.28
CEAT 21.40 8.74 13.71 44.22 Buy 17 1.06 0.78
Apollo Tyres 17.13 8.08 6.82 34.10 Buy 25 0.97 1.21
MRF 28.08 12.06 9.26 20.68 Sell 4 1.06 0.14
* 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
JANUARY TO MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.5370 Indian rupees
(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D’Souza)
