JK Tyre Market Demand: With demand expected to remain robust, JK Tyre plans to enhance its tyre production capacity by 20% by 2025. The company can currently produce around 3.4 crore tyres per annum from its 12 manufacturing facilities across India and Mexico.
CRISIL Rating Tyre: A CRISIL Ratings analysis of India’s top six tyre manufacturers, accounting for ~80% of the sector’s INR 85,000 crore revenue, indicates that the operating margin should see a sharp expansion of 300-400 basis points to 13-14% this fiscal due to the softening prices of key raw materials, which are largely crude-linked. The higher profitability and moderate capital expenditure should improve their debt metrics this fiscal.