JK Tyre & Industries Q4 net profit slips 50% at Rs 13 crore; mulls acquiring rubber firms
The net sales during the fourth quarter of last fiscal, however, increased by 28.53 per cent to Rs 1,347 crore from Rs 1,048 crore in the year-ago period.
By PTI | Updated:
NEW DELHI: JK Tyre & Industries today reported 50 per cent fall in its net profit for the quarter ended March 31 at Rs 13 crore due to sever impact of high raw material prices.
In order to mitigate the impact of rising natural rubber prices, the company is "seriously evaluating" options to acquire firms engaged in plantation of the commodity. It has also earmarked a capex of Rs 960 crore for this fiscal.
The company had posted a net profit of Rs 26 crore in the January-March quarter last year, JK Tyre & Industries President and Director Arun K Bajoria told reporters here.
The net sales during the fourth quarter of last fiscal, however, increased by 28.53 per cent to Rs 1,347 crore from Rs 1,048 crore in the year-ago period.
"It was a very tough year in terms of raw material prices, which increased by about 43 per cent in last fiscal. The impact of this rise in our margin was 25-27 per cent, but we raised the tyre rates by only 17-18 per cent in FY11. So this impacted our bottomline," Bajoria said.
Besides, cheap imports of radial tyres from China has also affected the company as well as the industry, he added.
When asked about its strategy to counter the impact of rising raw material prices, Bajoria said: "We are looking at rubber plantation. We are seriously evaluating options to acquire companies engaged in rubber plantations."
He, however, declined to share details saying nothing has been finalised yet.
"We are also working on to substitute rubber by some other material," he said, adding, the R&D is going on at three different places across the country.
In order to mitigate the impact of rising natural rubber prices, the company is "seriously evaluating" options to acquire firms engaged in plantation of the commodity. It has also earmarked a capex of Rs 960 crore for this fiscal.
The company had posted a net profit of Rs 26 crore in the January-March quarter last year, JK Tyre & Industries President and Director Arun K Bajoria told reporters here.
The net sales during the fourth quarter of last fiscal, however, increased by 28.53 per cent to Rs 1,347 crore from Rs 1,048 crore in the year-ago period.
"It was a very tough year in terms of raw material prices, which increased by about 43 per cent in last fiscal. The impact of this rise in our margin was 25-27 per cent, but we raised the tyre rates by only 17-18 per cent in FY11. So this impacted our bottomline," Bajoria said.
Besides, cheap imports of radial tyres from China has also affected the company as well as the industry, he added.
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When asked about its strategy to counter the impact of rising raw material prices, Bajoria said: "We are looking at rubber plantation. We are seriously evaluating options to acquire companies engaged in rubber plantations."
He, however, declined to share details saying nothing has been finalised yet.
"We are also working on to substitute rubber by some other material," he said, adding, the R&D is going on at three different places across the country.
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