JK Tyre Posts Record Q2 Revenue of Rs 4,850 Crore

Revenue rose 20% YoY to Rs 4,850 crore; PAT grew 40% sequentially to Rs 60 crore.

Reader Takeaway: Strong demand and high utilization support record sales, while raw material cost inflation requires careful monitoring.

What just happened

JK Tyre & Industries delivered its highest-ever consolidated turnover of Rs 4,850 crore for the second quarter of fiscal 2027. The company saw sequential improvement in profitability, with PAT reaching Rs 60 crore and EBITDA climbing to Rs 343 crore. Operational efficiency remained robust, with capacity utilization exceeding 90% across major product lines like Truck & Bus Radials (TBR) and Passenger Line Radials (PLR).

Why this matters

The company’s ability to drive 22% domestic volume growth amidst challenging cost conditions highlights strong market demand. However, the rise in net debt by Rs 751 crore to Rs 5,696 crore is a point of note for investors. This increase was driven by higher working capital requirements tied to inflated raw material values and ongoing production scaling.

Costs and Margin Management

Raw material prices have surged roughly 30% over the last six months, squeezing operating margins. While the company achieved an 11-12% increase in Net Selling Realization (NSR) recently, management indicated that costs may rise another 4-5% in Q3. To combat this, the company plans further pricing actions to protect its 7.1% EBITDA margin.

Risks to watch

Investors should monitor the company's ability to successfully pass on cost increases to consumers without hurting volume demand. Additionally, the execution of the remaining Rs 500 crore in planned capital expenditure and its impact on the balance sheet and leverage will be critical in the coming quarters.

What to track next

Watch for the implementation of the guided 4-5% price hikes in Q3 and the subsequent impact on demand. Market participants will also track the debt trajectory as the current capex cycle approaches completion.