- 18 May 2023
- ICICI Securities
JK TYRES' MARGIN IMPROVEMENT LAGS PEERS FOR Q4FY23
JKTYRE - 383 Change: -10.70 (-2.72 %)News: Consolidated sales for the quarter came at ₹ 3632.5 crore, flat QoQ. EBITDA for the quarter came in at ₹ 376.2 crore with corresponding EBITDA margin at 10.4% (up 100 bps QoQ). PAT in Q4FY23 was at ₹ 108.4 crore, up 65% QoQ. Standalone EBITDA margins stood at 9.2% (up 75 bps QoQ with standalone gross margin expansion pegged at ~216 bps QoQ). Further board recommended final dividend of Rs2 per share.
Views: Company’s gross margin performance on standalone basis (at ~216 bps) is lower than its peers which have reported gross margin expansion in the range of 400-500 bps on QoQ basis. PAT performance was however satisfactory due to better margins, lower effective tax rate and exceptional items recorded (i.e. forex gains of ~|10 crore). Company generated healthy CFO of ~|1225 crore in FY23 vs ~|346 crore in FY22. Key monitorable going forward would be management commentary on margin trajectory and debt reduction on B/S front amidst increased capex spends.
Impact: Negative