Shares of JK Tyre & Industries surged as much as 13.87 per cent to Rs 80 apiece on the BSE in the early morning deals on Thursday. The company on Wednesday reported over three-fold jump in consolidated net profit to Rs 167.70 crore in the September quarter driven by gains from deferred tax liability.
It had posted a profit of Rs 45.78 crore in the same period last fiscal.
Consolidated revenue from operations during the second quarter stood at Rs 2,154.95 crore as against Rs 2,493.76 crore in the year-ago period, down 13.59 per cent, it added. During the period under review, the company said it has re-assessed deferred tax Liability at 25.17 per cent as against 34.94 per cent earlier following reduction in corporate tax rate to 22 per cent announced by the government.
"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," said Raghupati Singhania, Chairman & Managing Director of the Company.
JK Tyre recorded an impressive 20 per cent increase in sales in 2/3 wheeler tyres in the current quafier, compared to preceding quarter, though it is a new entrant in this segment, Singhania added.
The tyre manufacturer also expects the economy improve in the second half of the current financial year (FY20) saying the the green shoots are already visible with some improvement in economic activity.
At 09:47 am, the stock was trading nearly 11 per cent higher at Rs 77.85 apiece on the BSE. In comparison, the benchmark S&P BSE Sensex was trading at 40,263 levels, up 211.50 points or 0.53 per cent.
So far in the calendar year 2019, the stock of the company has underperformed the market by falling over 32 per cent (as of Wednesday's close) as against a nine per cent rise in the Nifty50 index.