J K Tyre reports loss of Rs 65.86 crore in Q1

JK Tyre & Industries on Monday reported standalone net loss of Rs 65.86 crore for the three months ended June 30, 2017 on back of increase in raw material costs, transition to new emission norms and new indirect tax regime.

The company had posted net profit of Rs 100.85 crore in the year-ago period.

Total income for the company in the period under review declined by 12.6% to Rs 1446.92 crore. Total expenses went up by 2.5% to Rs 1547.43 crore.

Raghupati Singhania, Chairman & Managing Director said, “We are indeed passing through challenging times. The raw material costs increased by about 30% over the corresponding quarter. Such steep increase in prices of raw materials without commensurate increase in selling prices dented margins. Moreover, unabated imports of cheap Chinese radial tyres impacted both volumes as well as prices of Truck/Bus radials.”

In addition, commercial vehicle manufacturers cut production, to de-stock inventories and transition to new emission norms, Singhania informed.

Dealers in the replacement market also, were reluctant to off-take tyres before GST introduction.

On a positive note, Singhania felt, that with the smoothening out of the GST roll out, the situation is likely to be somewhat better in the coming months. Expected imposition of anti-dumping duties on cheap Chinese imports will be a welcome step and should improve the commercial tyre market.