JK Tyre Eyes Margin Pressure Amid Rising Costs

JK Tyre & Industries foresees its EBITDA margin facing challenges in the first quarter of FY27 due to escalating raw material costs, spurred by geopolitical unrest in West Asia, according to Raghupati Singhania, the company's managing director.

The tyre manufacturer, after already implementing a 4-5% price hike during the March quarter, plans further increases of about 6% to mitigate rising input expenses. Despite these efforts, profit margins are likely to be pressured in the near future.

Singhania highlighted the impact of West Asian price increases on exports to the Middle East, disruptions in shipping, and increased container costs. In response, JK Tyre is diversifying its reliance on Western and Eastern suppliers to counteract raw material cost surges.

Addressing concerns about its Mexican operations, Singhania noted the subsidiary's significant contribution, constituting 20% of the portfolio. While revenue decreased by 16% to Rs 377.57 crore due to tariff issues, he stated these matters have been resolved, allowing a focus on the domestic, Latin American, and US markets.

JK Organisation reported an 80% year-on-year increase in consolidated net profit to Rs 177.96 crore for the March quarter, driven by robust domestic market volumes. Revenue from operations grew by 12.36% to Rs 4,223.44 crore, supported by ongoing GST-driven demand.

(With inputs from agencies.)