Shares of JK Tyre & Industries were trading near 5-year low of Rs 60 apiece, down 16 per cent in early morning deals, on the BSE on Friday, after the company reported a sharp 75 per cent drop in consolidated net profit at Rs 16 crore in the June quarter (Q1FY20) due to weak operational performance.
The tyres manufacturing company's profitability was hit due to overall slow-down in automotive sector, the management said. It had posted a profit of Rs 64 crore in the year-ago quarter.
The stock was trading at its lowest level since September 4, 2014, when it had touched Rs 58 on the BSE in intra-day trade.
The company’s revenue from operations during the quarter was up 6 per cent at Rs 2,575 crore, as against Rs 2,430 crore clocked in the corresponding quarter of previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortization) margin contracted 400 basis points (bps) to 9.3 per cent from 13.3 per cent in previous year quarter.
The management said challenging times seen during the Q1FY19 was a result of a considerable de-growth in the auto sales. Most of the original equipment manufacturers (OEMs) have reported heavy reduction in their sales volumes, it said.
The company expects the economy to improve from the second half of the current fiscal year, when the volumes are expected to pick-up resulting into improvement in profitability.
At 09:32 am, JK Tyre was down 10 per cent at Rs 64 on the BSE, as compared to a 0.87 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 5,30,658 shares changing hands on the NSE and BSE so far.