India’s JK Tyre posts second straight drop in profit on weak demand from bus, truck makers-OxBig News Network

(Reuters) – India’s JK Tyre reported a smaller profit for the second straight quarter on Tuesday, hurt by weak demand from truck and bus customers.

The tyre maker’s profit sank 77% to 515.2 million rupees ($5.92 million) in the third quarter from 2.21 billion rupees a year before.

Its revenue dropped marginally to 36.74 billion rupees.

Expenses rose 7%, led by a 6% climb in raw material costs.

Indian tyre makers are suffering from weak demand for new vehicles in the country this fiscal year and those more reliant on sales to truck and bus customers have been hit harder.

JK Tyre gets at least half of its revenue from such customers, mostly in its home market of India, that forms an even higher 80%-90% of revenue.

Commercial vehicle sales rose 1.2% during the quarter, but trailed overall auto sales growth of 3.1%, industry data showed.

Estimates (next 12 Analysts’ sentiment

RIC PE EV/EBI Revenue Profit Mean # of Stock to Div

TDA growth (%) growth rating* analyst price yield

JK Tyre 9.05 6.01 7.42 17.28 Buy 4 0.62 1.42

Apollo Tyres 13.73 6.77 7.46 26.24 Buy 22 0.79 1.37

MRF 21.62 10.26 10.79 12.70 Sell 4 0.94 0.18

CEAT 17.37 7.60 13.56 29.11 Buy 15 0.91 1.05

* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT

OCTOBER TO DECEMBER STOCK PERFORMANCE

($1 = 87.0800 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D’Souza)