What is your view on JK Tyres?

The Indian Stock Market has stocks listed from different domains/sectors.

One of the prominent sectors: The automobile sector that has the following under its ambit

  • Auto Manufacturers
  • Auto Ancillary
  • Tyre
  • Lubricants
  • Gear & Axles
  • Electronics etc.

Now let us focus on Tyre Industry

Listed Tyre Manufacturers in India

The Industry Leaders are – MRF, Balkrishna Industries, and Apollo Tyres

Tyres: Integral Part of the Automobile Industry

They have a vivid customer, manufacturing, and supply base which moves across continents

One of the smaller companies is JK Tyre & Industries. The stock performance for the past year is as follows:

JK Tyre Stock Performance in the past year

The stock has given a return of ~100%

Considering this, is it worth investing in it?

Let us delve further into it

  • JK Tyre Focusses on Commercial(Bus/Truck), Retail(Passenger Car/ Motor/Scooter), Farm, Three Wheeler, Retread Tyre Market
  • Its EPS(Earning Per Share) & Book Value has been Increasing Year on Year(Y-O-Y)
  • It is one of the few stocks with a P/E ~ 10 (which makes it a value buy)
  • No share pledge by the promoters
  • There are some red flags

Considering all this, I would be cautious at entering at these levels and would like to wait out and see the management action prior to holding it in my portfolio

Warren Buffet: Oracle of Omaha

Hope you find this helpful

Please Feel Free to share and Contribute if you like our work.

God Bless!

Reference:

  1. Tyre Stocks
  2. Ratings Downgrade

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