J K Tyre plans Rs 1,100-crore capacity expansion over next two years

J K Tyre & Industries Ltd is planning to incur a capex of Rs 1,100 crore in capacity expansion over the next two years.

The proposed capex includes expansion of truck bus radials (TBR) capacity at Cavendish Industries (a subsidiary in which the company holds 87.48 per cent), and PCR (passenger car radials) capacity at the Banmore plant.

Cavendish recorded its highest-ever turnover of Rs 3,869 crore, an increase of 29 per cent in FY23. Production was also at an all-time high across product categories.

Also read: JK Tyre Q4 net profit jumps multifold to ₹111.56 crore

“With the anticipated robust demand in the tyre industry, particularly in the PCR and TBR segments, we are confident that our ₹1,100-crore capex plan will propel the next phase of growth in the year ahead,” said Anshuman Singhania, Managing Director, in the latest annual report.

The capacity expansion will lead to a 35 per cent increase in PCR production and enhance overall capacity to 34 million units, up from 33 million in FY23.

Revenue is expected to grow by 9-10 per cent in FY24, supported by continued strong demand from OEMs and a recovery in the demand from the replacement market, though this is likely to be offset by subdued exports, said a recent India Rating’s report on the company.

In FY23, consolidated revenue grew 22.2 per cent yoy to Rs 14,640 crore in FY23, supported by higher sales volumes, an improved product mix and higher realisations, driven by price hikes, and management-led initiatives such as thrust on export market sales, premiumisation across segments, new customer and model addition, and entry into the smart tyre segment and other premium offerings, such as puncture guard tyres and electric vehicle (EV) tyres.

Green products

In a bid to emerge as a green tyre company, JK Tyre has adopted a ‘Cradle-to-grave’ approach to deal with sustainability challenges and will be focusing on four areas: sustainable material usage, sustainable manufacturing practices, in-use tyre performance (low rolling resistance and high wear resistance) and 6R Strategy (reduce, reuse, recycle, renew, redesign and remanufacture).

In FY23 the company introduced many innovative products, including a fuel-saver range in the truck/ bus radialx and ultra high-performance passenger radials, more particularly for high-end cars. Most importantly, it has developed what the company calls “India’s greenest car tyre with 80 per cent recycled material.”

Going forward, JK Tyre will seek global partnerships to enhance the adoption of green products and recycled materials. Eco-friendly green tyres will be developed with the aim of effectively reducing rolling resistance, resulting in lower emissions, improved mileage, and enhanced fuel efficiency.

JK Tyre is actively working on developing Polymers (TDP) and implementing the cryogenic process for Molecular Recycling of Polymers (MRP). These initiatives are aimed at offering eco-friendly tyre solutions and reducing environmental impact throughout the tyre lifecycle. The company is also focused on widening its range of electric vehicle (EV) tyres, catering to the growing electric vehicle market.