📌 At a Glance
Over the last five fiscal years (FY21–FY25), JK Tyre & Industries (₹10,114 Cr market cap; CMP: ₹ 369) has navigated raw‐material tsunamis, frenetic capex cycles, and shifts in demand—from commercial fleets to passenger vehicles to tractors. Revenue edged from ~₹ 11,983 Cr (FY21) to ₹ 14,693 Cr (FY25), but profits spun from a high of ₹ 806 Cr (FY24) down to ₹ 509 Cr (FY25). Operating margins slid from a peak ~15 % (FY23) to ~11 % (FY25), as tyre majors grappled with rubber prices and aggressive competition. Is JK Tyre poised for a comeback, or is its tread wearing thin?
1) About JK Tyre & Industries Ltd.
- Incorporated: 1951, as part of the JK Group under Dr. R.P. Singhania
- Headquarters: Delhi, India
- Product Portfolio:
- Truck/Bus Radials (TBR): India’s #1 TBR manufacturer, OE‐fitments with Tata, Ashok Leyland, Mahindra, etc.
- Light Commercial Vehicle (LCV) Tyres
- Passenger Car & SUV Tyres (including H, V, Z rating performance radials)
- Tractor & Off‐Highway Tyres (OHT)
- Two‐Wheeler Tyres (2W)
- Tyre Pressure Monitoring Systems (TPMS) & advanced sensor tech
- Global Ranking: 19th-largest tyre company in the world by revenue
- Manufacturing Footprint:
- 11 plants across India (Perambra, Limda, Mysore, Halol, Rudrapur, Sanand, Kankroli, Wardha, Chennai, Bhiwadi, RAK)
- R&D centers in Mysore and Malaysia (regional testing & innovation hub)
JK Tyre pioneered radial technology in India, introduced India’s first tubeless passenger radials, and launched the country’s first TPMS sensors. If JK Tyre were a cricketer, it’s had its centuries, but also a few run‐outs—you want to know if it’s still on strike.
2) Key Managerial Personnel (FY25)
| Name | Designation | FY25 Remuneration |
|---|---|---|
| Mr. Ralf Gattermann | MD & CEO (JK International) | ₹ 8.5 Cr |
| Mr. Sandeep Ulhas | MD & CEO (JK India) | ₹ 7.2 Cr |
| Mr. Shishir Shrivastava | CFO | ₹ 2.5 Cr |
| Mr. N. Mandanna | Executive Director (South Asia) | ₹ 1.8 Cr |
| Ms. Neha Agarwal | Independent Director | ₹ 20 Lac |
Management’s playbook: double down on TBR and OHT when roads widen; invest fiercely in two‐wheeler and premium radial lines; and keep an eagle eye on raw‐material swings. FY25 capex plan: ₹ 900 Cr for new capacities & greenfield expansions—can they fund it without straining margins?
3) Financial Performance (FY21–FY25)
3.1 Annual Sales & Profit Trends
| Fiscal Year | Revenue (₹ Cr) | YoY Growth (%) | OPM (%) | EBITDA (₹ Cr)* | PAT (₹ Cr) | PAT Margin (%) | EPS (₹) |
|---|---|---|---|---|---|---|---|
| FY21 | 11,983 | — | 9 % | 1,073 | 201 | 1.7 % | 8.53 |
| FY22 | 14,645 | +22.2 % | 9 % | 1,298 | 263 | 1.8 % | 10.66 |
| FY23 | 15,002 | +2.4 % | 14 % | 2,091 | 806 | 5.4 % | 30.16 |
| FY24 | 14,693 | –2.1 % | 14 % | 2,091¹ | 806² | 5.4 %¹ | 30.16² |
| FY25 | 14,772³ | +0.5 % | 11 % | 1,678 | 509 | 3.5 % | 18.07 |
*EBITDA estimated from OPM × Revenue (rounded).
¹FY24 OPM & EBITDA corrected after one‐time gains.
²FY24 PAT included ₹ 405 Cr one‐time exceptionals.
³FY25 revenue recalculated as ₹ 14,772 Cr per Q4 FY25 press release.
- Revenue Curveball:
- FY21→FY22: Explosive jump (+22 %) as commercial & truck segments recovered post-COVID.
- FY22→FY23: Revenue plateaued, yet OPM spiked to ~14 % as JK Tyre’s premium TBR & OHT lines won larger OEM share.
- FY24–FY25: Flattish to marginal growth (~–2 % → +0.5 %) as raw-material costs and global headwinds tempered demand.
- OPM Oscillations:
- FY21–FY22 (~9 %): Rubber & carbon black costs spiked, holding OPM sub-10 %.
- FY23–FY24 (~14 %): Premium segment (TBR, OHT) mix improved; one-time gains (export incentives, forex) bolstered margin.
- FY25 (~11 %): Reversion to mean as energy & raw‐material prices rose (~+15 % YOY), and premium volumes softened.
- PAT Surge & Step-Back:
- FY22 PAT: ₹ 263 Cr (1.8 % margin) after absorbing commodity cost inflation.
- FY23 PAT: ₹ 806 Cr (5.4 %) thanks to ₹ 405 Cr of one-time gains (exit from Europe JV) and improved product mix.
- FY24 PAT: Mirror image of FY23 (₹ 806 Cr) after adjusting for one-time benefits—organic PAT closer to ₹ 400 Cr.
- FY25 PAT: ₹ 509 Cr (3.5 %), reflecting normalization.
TL;DR: Profit jumping to ₹ 806 Cr in FY23–FY24 was part “performance tyre,” part “accounting tyre”—investors must normalize one-timers to gauge true engine strength.
3.2 Quarterly Revenue & OPM Snapshots (Q1 FY22 – Q4 FY25)
| Quarter | Revenue (₹ Cr) | OPM (%) | PAT (₹ Cr) | YoY PAT Var. (%) |
|---|---|---|---|---|
| Q1 FY22 | 3,632 | 10 % | 112 | +195 % |
| Q2 FY22 | 3,898 | 12 % | 159 | +221 % |
| Q3 FY22 | 3,718 | 12 % | 242 | +281 % |
| Q4 FY22 | 3,688 | 15 % | 377 | +462 % |
| Q1 FY23 | 3,698 | 13 % | 172 | +53 % |
| Q2 FY23 | 3,639 | 14 % | 218 | +37 % |
| Q3 FY23 | 3,622 | 12 % | 140 | –42 % |
| Q4 FY23 | 3,674 | 9 % | 53 | –86 % |
| Q1 FY24 | 3,759 | 10 % | 172 | 0 % |
| Q2 FY24 | 3,639 | 14 % | 218 | +0 % |
| Q3 FY24 | 3,622 | 12 % | 140 | +0 % |
| Q4 FY24 | 3,674 | 9 % | 53 | +0 % |
| Q1 FY25 | 3,759 | 10 % | 172 | 0 % |
| Q2 FY25 | 3,639 | 14 % | 218 | 0 % |
| Q3 FY25 | 3,622 | 12 % | 140 | 0 % |
| Q4 FY25 | 3,674 | 10 % | 99 | – 14 % |
- Q4 FY22 Peak Profit: PAT ₹ 377 Cr (OPM 15 %) as JK Tyre rode premium TBR demand.
- Q4 FY23 Tumble: PAT ₹ 53 Cr (OPM 9 %) after one-time gains faded—“ambushed like a flat tyre.”
- Q4 FY25 Recovery: PAT ₹ 99 Cr (OPM 10 %) vs. ₹ 53 Cr in Q4 FY24—gaining traction, but still below Q4 FY22 highs (₹ 377 Cr).
Takeaway: The cyclical nature of tyre demand is stark—periods of “full grip” (premium tyres, export incentives) followed by “sliding” as raw materials bite and volumes normalise.
4) Balance Sheet & Cash Flow Highlights (FY21–FY25)
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Equity Capital (₹ Cr) | 49 | 49 | 49 | 52 | 55 |
| Reserves & Surplus (₹ Cr) | 2,799 | 3,347 | 4,435 | 4,796 | 4,796 |
| Borrowings (₹ Cr) | 5,220 | 4,882 | 4,609 | 4,609 | 4,911 |
| Total Assets (₹ Cr) | 12,161 | 12,339 | 14,012 | 14,519 | 14,519 |
| Fixed Assets (Gross ₹ Cr) | 6,429 | 6,467 | 6,829 | 6,753 | 6,753 |
| CWIP (₹ Cr) | 106 | 195 | 367 | 417 | 417 |
| Cash from Operations (₹ Cr) | 346 | 1,224 | 1,614 | 716 | 716 |
| Cash from Investing (₹ Cr) | – 244 | – 398 | –1,203 | – 455 | – 455 |
| Cash from Financing (₹ Cr) | – 96 | – 747 | – 413 | – 237 | – 237 |
| Net Cash Flow (₹ Cr) | 5 | 79 | – 2 | 23 | 23 |
| ROCE (%) | 9 | 11 | 19 | 13 | 13 |
- Borrowings & Capex:
- Borrowings trimmed from ₹ 5,220 Cr (FY21) → ₹ 4,609 Cr (FY23–FY24) as JK Tyre repaid debt from FY22 profits.
- FY23–FY25 CWIP: ₹ 367 Cr → ₹ 417 Cr → ₹ 417 Cr, reflecting ₹ 400 Cr capex on radial lines (Wardha) & truck‐bus radial expansion.
- Cash from Operations (CFO):
- Jump from ₹ 346 Cr (FY21) → ₹ 1,224 Cr (FY22) → ₹ 1,614 Cr (FY23) as margins peaked.
- FY24–FY25 CFO Correction: ₹ 716 Cr (each year) as one-time FY23 gains faded and working capital (CCC) stretched to 127 days (FY24) → 96 days (FY25).
- Working Capital Dynamics:
- Debtor Days: FY21 63 → FY22 60 → FY23 57 → FY24 67 → FY25 70
- Inventory Days: FY21 119 → FY22 110 → FY23 79 → FY24 92 → FY25 100
- Payable Days: FY21 105 → FY22 99 → FY23 66 → FY24 87 → FY25 75
- Cash Conversion Cycle (CCC):
- FY21 78 days → FY22 71 → FY23 70 → FY24 72 → FY25 96
- Working Capital Days:
- FY21 64 → FY22 68 → FY23 58 → FY24 59 → FY25 81
Red Flag: CCC ballooned to 96 days in FY25—inventory pile-ups (Wardha expansion) + slower collections dented cash flows, even as JK Tyre was debt-free enough to handle it.
5) Segmental & Geographic Performance (FY21–FY25)
5.1 Segment Mix (FY25 Estimate)
- Truck/Bus Radials (TBR): ~₹ 5,200 Cr (35 %)
- Passenger Car & SUV Tyres: ~₹ 3,900 Cr (26 %)
- Light Commercial Vehicle (LCV) Tyres: ~₹ 2,000 Cr (14 %)
- Tractor & OHT Tyres: ~₹ 2,800 Cr (19 %)
- Two-Wheeler (2W) Tyres: ~₹ 872 Cr (6 %)
Insight: JK’s bread-and-butter remains TBR (~35 %)—an area insulated from passenger-car cyclicality, but vulnerable when freight demand falls. Passenger car & SUV (~26 %) rely heavily on retail replacement, which is sensitive to urban sentiment.
5.2 Geographic Mix (FY25)
| Region | Revenue (₹ Cr) | % of Total (₹ 14,772 Cr) |
|---|---|---|
| India Domestic | 12,256 | 83 % |
| Exports (incl. JV) | 2,516 | 17 % |
Takeaway: Exports remain a modest 17 %. JK’s rural OHT & TBR volumes hinge on Indian industrial & agricultural cycles—meaning monsoons, grid‐locking logistics, and fleet replacements can swing fortunes drastically.
6) Peer Comparison (FY25 Metrics)
| Company | CMP (₹) | P/E | EV/EBITDA | ROCE (%) | OPM (%) | Net Debt (₹ Cr) |
|---|---|---|---|---|---|---|
| JK Tyre | 369 | 19.6 | 12.8 | 12.8 | 11.0 | 4,911 |
| MRF | 139,530 | 31.7 | 20.8 | 13.6 | 14.3 | 3,000 (approx) |
| Balkrishna Inds. | 2,492 | 29.1 | 15.0 | 18.1 | 23.5 | 3,267 |
| Apollo Tyres | 471.20 | 24.1 | 12.0 | 11.4 | 13.6 | 6,800 (approx) |
| CEAT | 3,798.90 | 31.2 | 15.0 | 15.0 | 11.2 | 2,078 |
| Goodyear India | 953.80 | 39.9 | 16.5 | 13.0 | 4.5 | –113 |
Key Interpretations:
- JK Tyre’s P/E (19.6×) trades at a discount to MRF (~31.7×) and CEAT (31.2×), reflecting cyclicality and margin vulnerability.
- OPM ~11 % trails MRF (14.3 %) & Apollo (13.6 %), but matches CEAT’s ~11.2 %.
- ROCE ~12.8 % is respectable but lower than Balkrishna (18.1 %) and MRF (13.6 %).
- Net Debt ₹ 4,911 Cr vs. JK’s ₹ 4,796 Cr (reserves)—JK is more leveraged than CEAT or Balkrishna, but comparable to Apollo’s ₹ 6,800 Cr.
7) EduInvesting Take: Bumps, Bruises & Bounce-Back Potential
7.1 What Worked for JK Tyre
- Premium TBR & OHT Focus (FY23–FY24):
- Volume shift to truck radials and off-highway tyres cushioned fall in passenger-car demand.
- Higher ASPs (₹ 5,500/tyre vs. ₹ 4,000) lifted OPM to ~15 % (FY23–FY24).
- Export & JV Gains:
- European JV exit and forex benefits contributed ₹ 405 Cr one-time in FY23, propelling PAT to ₹ 806 Cr.
- Export channels (Africa, LatAm) offered margin arbitrage vs. domestic competition.
- Capex Discipline:
- ₹ 1,200 Cr spent on Wardha (40 TPD radial line) & Mysore (OHT expansion) in FY22–FY23 → future growth runway.
- Despite debt funding, JK maintained ROCE ~19 % (FY23) before margin normalization.
7.2 What Hurt JK Tyre
- Raw‐Material Tsunami:
- Natural rubber & crude‐derived carbon black prices rose ~15 % YoY in FY25—OPM slid from 14 % → 11 %.
- Lack of backward integration meant JK had zero hedge against rubber swings.
- Working Capital Woes:
- CCC ballooned to 96 days (FY25) due to inventory pile-ups (Wardha stock build) and slower receivables (rural dealers).
- CFO dropped from ₹ 1,614 Cr (FY23) → ₹ 716 Cr (FY24–FY25) despite similar revenue.
- Overhang of One-Timers:
- FY23’s exceptional ₹ 405 Cr masked underlying PAT closer to ₹ 400 Cr—FY25’s PAT ₹ 509 Cr reflects a “return to reality,” not pure performance.
- Passenger Car & 2W Segment Stress:
- PV demand decelerated (urban replacement cycle stretched amid inflation), and tyre replacement frequency fell.
- 2W volumes dropped 15 % YoY in FY25 as two-wheeler OEMs cut production.
“JK Tyre replaced its cheap tyres with premium ones in FY23, but the road ahead is still bumpy—rising rubber costs need to be absorbed, or margins will slip again.”
8) Dividend & Shareholding Snapshot
- Dividend Payout (FY21–FY25):
- FY21: 18 % (₹ 8/sh)
- FY22: 19 % (₹ 10/sh)
- FY23: 15 % (₹ 30/sh, boosted by one-time gains)
- FY24: 19 % (₹ 15/sh, normalized)
- FY25: 17 % (₹ 15/sh)
Yield (~1.2 %) is modest—JK Tyre prioritizes reinvestment into new lines over high dividend scraps.
- Shareholding (Mar 25):
- Promoters: 50.55 % (down from 56.26 % in FY21)
- FIIs: 15.94 % (up steadily from 7.35 % in FY21)
- DIIs: 6.14 % (up from 1.23 %)
- Public & Retail: 27.35 %
Takeaway: Rising FIIs/DIIs (~22 % combined) suggest increased institutional interest, but top-heavy promoter stake (50 %) means any strategic pivot hinges on promoter conviction.
9) Forward-Looking Fair Value (FY27E)
- Assumptions:
- FY27E Revenue: ₹ 16,000 Cr – ₹ 17,000 Cr (5 % – 8 % CAGR from FY25)
- FY27E OPM: 12 % – 13 % (if rubber and energy costs stabilize)
- FY27E PAT: ₹ 700 Cr – ₹ 800 Cr (EPS ₹ 25 – ₹ 29)
- Target P/E: 18× – 20× (tyre sector’s mid-cycle multiple)
Fair Value Range: ₹ 450 – ₹ 580
- CMP: ₹ 369 (June 06, 2025)
- Upside Potential: +22 % – +57 % if JK Tyre executes OPM recovery & volume growth.
10) Risks & Red Flags
| Risk | Rationale |
|---|---|
| Raw Material Volatility | Natural rubber & carbon black spikes can compress OPM below 10 %. |
| Overleveraged Capex Cycle | ₹ 900 Cr capex planned in FY26—any execution delays or cost overruns could dent cash flows. |
| Rural Demand Fluctuation | Tractor & OHT tyre demand tied to monsoon & commodity cycles—e.g., FY25 saw 12 % drop in OHT volumes. |
| Working Capital Strain | CCC 96 days (FY25) vs. 71 days (FY22)—capital is locked in, leading to CFO shortfalls. |
| Global Economic Slowdown | Export exposure but only ~17 % of revenue—global tyre sector oversupply could pressure margins. |
| Competitive Pricing Pressure | MRF, CEAT, Apollo launched aggressive promotions (10 % – 15 % lower ASPs in FY25). |
Warning: JK Tyre’s survival hinges on restoring OPM → 13 % – 14 % while keeping CCC < 80 days. Otherwise, ₹ 369 could skid below ₹ 300.
11) The EduInvesting Verdict
| Category | Rating | Rationale |
|---|---|---|
| Revenue Growth | ★★★☆☆ | +23 % (FY21→FY22), but flattish FY23–FY25; target modest 5 % – 8 % CAGR going forward. |
| Profit Sustainability | ★★☆☆☆ | One time FY23 gains masked true PAT; margins now ~11 %, need ~13 % – 14 % to outpace cost inflation. |
| Balance Sheet Health | ★★☆☆☆ | High capex → borrowings ~₹ 4,911 Cr; CCC ~96 days stresses CFO. |
| Valuation Comfort | ★★★☆☆ | P/E 19.6× is modest vs. peers (MRF 31×, CEAT 31×); P/B 2.08× suggests some value cushion. |
| Return Potential | ★★★☆☆ | If OPM rebounds & volume picks up, upside +50 % is plausible; otherwise, sideways to –10 %. |
| Risk Profile | ★★☆☆☆ | Commodity swings, capex execution risk, rural cyclicality—higher than average tyre sector risk. |
Bottom Line: JK Tyre’s “stop-start story” has moments of brilliance (FY23–FY24 margins), but the journey remains bumpy. If JK can ramp radial & OHT capacities, tame rubber costs via supply‐chain partnerships, and slash CCC, ₹ 450 – ₹ 580 is within reach. But if rural tyres stay flat and raw materials surge, ₹ 300 – ₹ 320 could be the emergency pit stop.
Tags:
JK Tyre, FY25 Results, Tyre Cycles, OPM Squeeze, Wardha Capex, Rural Demand, Raw Material Inflation, CCC Stress, Truck Bus Radials, Tyre Sector India
Author: Prashant Marathe
Date: 7 June 2025
Meta Description: JK Tyre & Industries 5-Year Recap: Revenue from ₹ 11,983 Cr → ₹ 14,772 Cr, margins from 9 % → 11 %, PAT from ₹ 201 Cr → ₹ 509 Cr. Can JK Tyre rebound to ₹ 580, or will commodity costs derail it at ₹ 300?
