India Ratings affirms ratings of JK Tyre at 'AA-' with 'stable' outlook
India Ratings and Research stated that the affirmation reflects JKTILs strong market position in the truck and bus tyres segment, both bias as well as radial, and an improving product mix with a higher proportion of margin-accretive products in the overall revenue contribution.
Furthermore, with an improved capacity utilisation across product categories and geographies, the companys revenue grew at CAGR of 11% over FY20-FY25.
During FY25, the companys revenue and EBITDA levels plummeted amid a demand slowdown in the commercial vehicle (CV) segment as well as in its overseas entity while its EBITDA margins moderated on account of a significant rise in the raw material prices during the year.
As a result, the companys net leverage elevated in FY25, and is likely to remain high in FY26 as well amid the large capex planned out in its Indian operations.
However, with a likely improvement in the demand scenario, improved capacity utilisation and an anticipation of a stable raw material prices, would help to keep net leverage within Ind-Ras rating trigger.
The ratings also reflects JKTILs diversified revenue base and improving brand presence across segments.
JK Tyre & Industries (JKTIL) is a leading tyre manufacturer in India. JKTIL operates through nine plants in India and two in Mexico, with an installed capacity of 35 million tyres annually.
The scrip fell 1.80% to currently trade at Rs 361 on the BSE today.
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