The stock fell as much as 5.91% at the day's low at Rs 73.15 in morning trade.

The tyre maker's consolidated net profit declined 59% to Rs 10.95 crore in Q3 December 2019 from Rs 26.68 crore in Q3 December 2018. Profit before tax (PBT) stood at Rs 23.31 crore in Q3 December 2019, down by 48.2% from Rs 45 crore reported in Q3 December 2018.

Net sales fell 19.4% to Rs 2199.80 crore in Q3 December 2019 from Rs 2730.77 crore in Q3 December 2018. While India business revenues fell 21.32% to Rs 1917.10 crore, Mexican earnings contracted by 4.65% to Rs 312.94 crore in Q3 December 2019 over Q3 December 2018.

Total expenditures of the company stood at Rs 1955.64 crore in Q3 December 2019, down by 21.3% as compared to Rs 2486.07 crore in Q3 December 2018, primarily on account of reduction in raw materials costs (down 25.6%) and finished goods purchases (down 88%).

Dr. Raghupati Singhania, chairman & managing director, JK Tyre & Industries, said, “It was indeed a challenging quarter for the automotive industry. Passenger and commercial vehicles have witnessed a drastic cut in production. JK Tyre has dealt with this difficult situation by focusing on replacement sales and exports. As a result, the company on a standalone basis recorded an increase of 13% in sales compared to the preceding quarter. Exports are up by nearly 40 % during the 9-month period of the current financial year. This twin strategy augurs well for the future.”

The company's subsidiaries namely, JK Tomel, Mexico and Cavendish Industries continue to perform well, the tyre manufacturer said in a statement.

JK Tyre and Industries manufactures a wide range of automobile tires, tubes and flaps. The company also operates a chain of tire outlets across the country which sell the company's tires in addition to providing a range of automotive services, including wheel alignment and tire changing.

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Net profit of JK Tyre & Industries declined 58.96% to Rs 10.95 crore in the quarter ended December 2019 as against Rs 26.68 crore during the previous quarter ended December 2018. Sales declined 19.44% to Rs 2199.80 crore in the quarter ended December 2019 as against Rs 2730.77 crore during the previous quarter ended December 2018.

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JK Tyre & Industries will hold a meeting of the Board of Directors of the Company on 30 January 2020.

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On consolidated basis, the net profit jumped 160.20% to Rs 201.47 crore on a 13.59% drop in net sales to Rs 2154.95 crore in Q2 September 2019 as against Q2 September 2018.

A spurt in net profit was driven by gains from deferred tax liability. During the period under review, the company said it has re-assessed deferred tax liability at 25.17% as against 34.94% earlier following reduction in corporate tax rate to 22% announced by the government. Accordingly, reversal of provision for deferred tax liability of Rs 158.04 crore has been done during current quarter of financial year 2019-20, it said.

JK Tyre & Industries CMD Raghupati Singhania said Indian economy, more particularly the Auto Industry, is passing through challenging times. Production for both passenger and commercial vehicles has been cut drastically during the quarter gone by. The company is navigating through these difficult times by focusing on all-round cost reduction on one hand, and renewed focus on exports on the other. JK Tyre recorded 20% increase in sales in two- and three-wheeler tyres in the current quarter, compared to preceding quarter, though it is a new entrant in this segment, Singhania added.

In its outlook, the company said it expects Indian economy to improve in the second half of current financial year and the green shoots are already visible with some improvement in economic activity. Volumes are expected to increase, resulting in improvement in profitability in the remaining period of the current financial year, the firm added.

JK Tyre has advanced 17.84% in four consecutive trading sessions to its current market price of Rs 77.6 from its previous closing low of Rs 65.6 on 25 October 2019.

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