JK Tyre & Industries reported a sharp decline in June-quarter profit as higher raw material costs weighed on operating performance. According to reports from The Economic Times, consolidated net profit fell 73% year-on-year to ₹44.09 crore, compared with ₹163.35 crore in the corresponding quarter last year. The company reported a one-time gain of ₹11 crore during the quarter, compared with a gain of ₹12.6 crore in the year-ago period. Revenue, however, edged up 2% to ₹3,946.24 crore from ₹3,868.94 crore a year ago. At the operating level, EBITDA declined 36% year-on-year to ₹258 crore, compared with ₹403 crore in the year-ago period. The EBITDA margin consequently contracted to 6.5% from 10.4% in Q1FY26, reflecting intense input cost pressure.
Shares of JK Tyre & Industries fell over 5% after the earnings announcement, touching an intraday low of ₹389.45 on the NSE. As reported by CNBC TV18, the sharp decline reflects investor concerns over the company's margin compression despite strong volume growth. The stock movement reflects market sentiment about the impact of rising raw material costs and the ongoing West Asia crisis on the tire manufacturer's profitability. The results showcase immediate headwinds for the tyre sector due to elevated shipping costs and crude derivatives, with margins likely to bottom out in Q1 before potential recovery in H2 as supply chains adjust.
According to The Economic Times and CNBC TV18, domestic volumes grew by 25% on year-on-year basis during the quarter. Replacement volumes rose 12% and original equipment (OE) volumes increased 42%, with the OEM business acting as the primary growth engine. Chairman and Managing Director Raghupati Singhania noted that the company continued to see steady demand momentum across segments, with a focus on customer centricity, product excellence and disciplined execution. The strong volume growth was supported by demand momentum across markets and increasing contribution from higher-value-added products, with a shift toward high-value-added products continuing to strengthen the company's domestic product portfolio. The company also continued its premiumisation strategy, with the share of passenger car tyres measuring 16 inches and above increasing to 32% from 29% a year earlier.
As reported by The Economic Times and CNBC TV18, the continuing West Asia crisis led to a sharp increase in raw material prices which impacted the company's gross and operating margins. Singhania explained that around 70% of tyre industry raw materials are petro-based, leaving the sector particularly vulnerable to movements in oil prices. The crisis created significant pressure on the company's cost structure, ultimately squeezing profitability despite strong underlying demand conditions. Total expenses in the first quarter were higher at ₹3,912.75 crore compared to ₹3,695.08 crore in the year-ago period, with costs of materials consumed rising to ₹3,036.51 crore from ₹2,266.69 crore in the previous year. Input prices increased by around 20% quarter-on-quarter in the June quarter and were expected to rise by another 9-10% in the September quarter, although recent moderation in crude oil and commodity prices could ease cost pressures going forward. Tyremakers have begun executing staggered price hikes ranging from 4% to 11% to mitigate these pressures, counting on resilient domestic replacement demand to absorb the increases.
Looking ahead, Singhania said JK Tyre remains confident of improving its performance in FY27, with a sharper focus on operating leverage, cost reductions and increasing the share of premium products. The company is targeting double-digit revenue growth and higher profitability through strategic expansion. According to The Economic Times, JK Tyre & Industries is the flagship company of the JK Organisation and is among the top 20 tyre manufacturers globally, with 11 manufacturing facilities, nine in India and two in Mexico, with a combined capacity of over 38 million tyres annually. The company has completed capital expenditure of ₹1,400 crore, is executing another ₹1,130 crore expansion and has approved a phased investment of ₹4,980 crore over the next three years to expand production capacity. Exports remained muted due to capacity constraints as the company prioritised supplies for the domestic market despite strong overseas demand. On the company's outlook amid geopolitical uncertainty and a high base, the management said it remained optimistic about demand across commercial vehicles, passenger vehicles, tractors and two-wheelers, reiterating its guidance of double-digit revenue growth for FY27.
