jk tyre & industries ltd share price Management discussions

Economic & Business Environment

The Global Economy has been facing persistent shocks for the last 2 years. Post the pandemic recovery, the geo political turmoil caused tectonic changes, snowballing into a global economic crisis, with soaring commodity prices and skyrocketing inflation. The countermeasures put in place were no less painful, leaving countries to battle through a unique set of challenges. For India, the year 2022 was special. It marked the 75th year of Indias Independence. With the nominal GDP of India touching US$ 3.5 trillion, clocking a growth of nearly 7 percent (EST) for financial year 2022-23, India remained one of the fastest growing economies in the world. The resilience of the Indian economy was evident. The rebound in consumption was engineered by the normalisation of work environment that lifted consumer sentiments and also facilitated peoples return to work sites across the country. The Central Government, committed large spends on infrastructure which gave major impetus to the economy, boosting production activity and resulting in an increase in capacity utilization across sectors.

India, too, was affected by sharp inflation, which, however, slowed considerably in the latter half of the year after policy interventions. Facing global headwinds, export of goods and services slowed down, especially towards the end of the financial year. Foreign exchange reserve levels, however, were comfortable. GST collections grew at a healthy 22.7% in financial year 2022-23. Riding on a good monsoon, the agricultural growth is projected to touch a level of 3.5%. The overall index of industrial production indicated single digit growth. The fundamentals of the Indian economy remained sound as it entered its Amrit Kaal, the 25-year journey towards its centenary as a modern, developed democracy policies pursued carefully and consciously have ensured that the recovery is robust and sustainable. While clouds remain on the horizon, the India Growth story remains intact with the financial year 2023-24 growth outlook remaining positive around 6%.

Automotive Industry

Financial year 2022-23 was the first normal year post pandemic and factors such as new model launches, infrastructure growth and rebound in demand led to robust double digit sales growth both in domestic & exports by 20% during the year. The industry took supply chain disruptions in its stride with efficient management and better availability of commodities, especially electronic items. Input costs, though a concern, moderated over the year. The growth in the economy translated to MHCV sale growing by close to 40% and LCVs sales growing by 23%. In the personal mobility sector, passenger vehicles sales jumped by 25% with UV segment registering nearly 33% growth. 2/3W sales, however, grew by 8% and has yet to touch pre-pandemic levels. Tractor Sales have grown by 10% during the year. The Industry sustained the focus on green mobility with rapid growth in Electric Vehicle Sales across categories, aided by the improvement in EV infrastructure and superior performance.

The outlook for the sector remains positive with the Government announcing various policy initiatives. The Indian market is expected to be the third largest in the world by volume by 2030 and contributes significantly to the GDP and overall employment. This development augurs well for the tyre industry.

The Tyre Industry

The Tyre Industry is not only capital intensive but equally material intensive process industry where input costs contribute approximately 70% to its cost of production. During the year the sector faced lot of headwinds in the first half, with the prime issues being raw material availability as well as high input costs. As the year progressed the commodity prices stabilised providing much needed relief. The rebound in the economy and growth in the OEMs provided the tailwinds. The after market too recorded healthy growth. Overall exports slowed especially during the last quarter. Radialisation reached a level of 60% in the commercial sector. The industry is extensively working and collaborating with the auto industry on developing tyres for Electric Vehicles. The Extended Producer responsibility for waste tyres is a major regulatory requirement for the industry.

JK Tyre - An Overview

JK Tyre continued on its growth path and recorded its highest ever turnover. We took the volatile business environment in our stride and stayed ahead of the curve. The continued challenges ranged from demand swings to supply constraints and overall economic uncertainty. Intelligent anticipation and adaptability to the evolving scenario enabled robust growth. At the heart of our endeavours was meeting customer expectations with a high level of engagement. Focus was on driving business initiatives that enhanced channel reach, revamped Fleet Management program - 2.0 and a greater emphasis on micro planning. Channel partner capability building backed by digital enablers ensured superior delivery of JK Tyre Products and Services. New product launches across categories and aggressive brand building, including the launch of Puncture Guard and Ultra High Performance (UHP) Levitas Ultra, ensured brand vibrancy. OEM business grew, which was supported by enlarged participation in new vehicle models. Price increases had to be periodically undertaken to partially offset higher cost inputs. JK Tyre is geared to meet the needs of the transforming mobility landscape of the country.

Brand JK Tyre

"Customer Centricity" was at the core of the brand initiatives during this financial year. This called for a differentiated approach to the marketing initiatives as well as communications. There was thrust on strategic presence across media, including print, radio and TV, for a greater mind share of the customers as well as stronger connect through various events and ground activations. Smart Tyre campaign was sustained over the year. Another major campaign centered around "Puncture Guard" – a revolutionary puncture protection technology for Car Tyres; high impact media assets were tapped into to drive high visibility among the key demographies across the country using a vernacular approach. Influencers with large social media following were also leveraged to drive awareness, to widen audience reach, as well as create a premium brand association. The drive to brand premiumization was further enhanced with the launch of UHP "Levitas Ultra" – a powerhouse innovation for the high-end car segment. Further product innovation was incorporated in the commercial category, with offerings designed to support the ambitions of the customers i.e. fuel efficiency and higher mileage amidst price fluctuations and rising fuel costs. Out Of Home advertising particularly was leveraged to create a differentiated brand imagery and awareness of our key SKUs. Customer connect was further enhanced through customer interaction programmes, both through virtual and on-ground initiatives. JK Tyres winning streak with brand & marketing continued this year as well. The various marketing campaigns were much lauded and won major brand and marketing awards over the year. Along with the Superbrand and ET Iconic Brand of India titles, JK Tyres Puncture Guard also won the prestigious BBC Top Gear India Editors Choice Innovative Auto Solution. The Puncture Guard radio campaign also won handsomely at the much admired e4m Golden Mike awards.

Digital Marketing

Digital continued to be a strong pillar for JK Tyres brand building initiatives and central to our visibility and engagement strategy. The digital campaigns were based on rich media innovation and promoted to a highly curated audience, thus improving our visibility across key target groups. The campaign for Puncture Guard was largely driven through digital marketing, with the TVC achieving a landmark 120+ Mn views on digital platforms. New age marketing initiatives also assisted in drawing awareness to the product benefits. Popular influencers were leveraged to drive communication and promotions for the campaigns on social media. Cross promotion of the brand on partner sites such as Tyreplex & CarDekho also garnered visibility among highly curated audiences. Digital platforms (Google My Business & Google Adwords) were also used to enhance online visibility and imagery for our channel partners, reaching out to nearly 50 million audiences across India. Digital initiatives undertaken were lauded through many awards and accolades.

Puncture Guard

JK Puncture Guard Tyre was launched with much fanfare and won plaudits for the innovative solution across the market. The products key benefit – of safe driving with a "puncture safe" tread – were extensively highlighted across platforms.

The aggressive multichannel marketing, was led by a light-hearted slice-of-life visual communication and high retail presence. Regular training and development programs additionally were conducted to educate the end customers and channels.

Smart Tyre

After the overwhelming response last year, Smart Tyre campaign continued its journey with a differentiated communication, which was promoted aggressively through digital, retail channels and print mediums. The products key benefit – which offers embedded temperature and pressure monitoring device along with superior comfort and safety enhancement at an affordable value – were extensively highlighted across platforms. Continued promotions at strategic out-of-home advertising locations, including Delhi Airport T-3 and other high impact locations were instrumental in driving high awareness and brand recall, influencing growing sales in the category.

Levitas Ultra

The Q4 financial year 2022-23 saw JK Tyre take another step towards brand premiumization, with the launch of Levitas Ultra – an ultra high-performance tyre, meant for dream machines. Perfected for top-end luxury cars, Levitas Ultra is the entrant product for JK Tyre in the luxury segment. The product, tested extensively and perfected on European soil, was launched in key cities across the country through exclusive media and dealer events. The product launch was also supported through a blitz digital media campaign.

Commercial – Truck, LCV & SCV


Premiumization in Truck & Bus Radial and Truck & Bus Bias categories was the key highlight. Next Generation Premium SKUs like Jetsteel JDC-XD, Jetsteel JDH-XM and Jetway JUC-XM gained traction among the consumers. Overall Radialization in M&HCV segment crossed the 50% mark in replacement market, with radialization crossing 80% in the OEM Segment. With BS-VI phase II emission norms kicking-in and rising fuel prices, the transporter community was finding it difficult to manage their operation cost. Understanding the needs of our transport fraternity and being pioneers in the technology, JK Tyre once again demonstrated the technological leadership by bringing a new range of fuel efficient tyres with low-RRc, Jetway JUH-XF & Jetsteel JDE-XF to the market. Jet Xtra XLM continued to gain further traction in the market. We continued our drive to educate transporter community with the concept of "Application to Fit" under initiative "Jaisa Vyapaar Vaisa Tyre" campaign. We were able to touch base with more than 5000 transporters and educated them on our premium products specific to their needs. The Company was able to onboard more than 12000 Small Fleet owners to its digital platform under this program. Further to instill customer confidence in JK Premium range of product a special product assurance program called "JK Assure" was launched to provide complete peace of mind to the customers.

Light & Small Commercial

Premium and application-based SKUs primarily drove the performance of the LCV & SCV categories. The LCV Bias range shifted completely to the Jet Xtra XLM pattern owing to its high acceptance for the universal application for both load and mileage. LCV/SCV digital connect programs were carried for end users in focus markets. In the Pick-up Bias category, a premium product Jumbo King + HD was introduced in four high demand sizes. JK Tyres leadership in the Pick-up segment was sustained. ‘Back To School campaign as designed for the Schools for promoting our best in class LCV Range Bias and Radial. Engagement campaigns with students saw high participation and brand recall.

At the ground level, eye check-up camps for individual LCV/SCV owners and drivers under "JK Jyoti Kiran" program were conducted pan India.

Passenger Vehicles Car Radial

During the year, Ultra High Performance tyres Levitas Ultra was launched, with the marketing theme being "Made for Dream Machines". Foray in this ultra-premium segment clearly defines our vision to excel in this high premium category of tyres. This product has been rigorously tested on Indian roads as well as the best drivers in Germany, to ensure it delivers an Ultra Experience to these high-end consumers. The design and technical engineers at JK Tyre have worked tirelessly to develop this UHP range of tyres that can handle the increased speeds, torque and G-forces produced by the extra horsepower, enhanced braking and sports-tuned suspension of the vehicle. Additionally, in our endeavour to drive brand premiumisation in the Passenger Car Radial category and to stand out as a brand which has a complete product portfolio for all kinds of application, the Ranger Series added a new feather in its cap with the launch of RANGER HPe, meant for Electric Vehicles. This new product is developed with a specialized Polymer compound and Anti-Drag Dimples (ADD) technology which ensures Higher Range (i.e., More Km/Charge), Low Rolling Resistance and Noise levels for the EV segment.

With an eye at the new and emerging segment of All Terrain (A/T) tyres, JK Tyre has introduced RANGER X-A/T, an Xtreme All-Terrain SUV Tyre with a new and aggressive sidewall design to uplift the overall aesthetics of SUVs and Traction Saw Rib Design (TRSD) to deliver exceptional control and comfort in all conditions.

Two /Three-Wheeler

With a goal to continuously expand & improve its product offering, over the course of FY22-23, JK Tyre came out with many new products in scooter, motorcycle & 3-wheeler segments. Our volume sales in the scooter segment grew by over a third and 3-wheeler & EV segments together witnessed a double-digit growth. The presence in multi-brand outlets significantly increased during the year.

This year, JK Tyre co-partnered with xBhp for Indians biggest road trip, #ROADTRIPUNITED2022, that featured 12,000+ riders from across India, covering 10,000+ kms over a course of 45 days. Key premium biking clubs around the country, along with exclusive coverage grabbed over 19 Million eyeballs. #ROADTRIPUNITED2022 campaign with xBhp focussed extensively on promoting our premium-most segment of tyres, the "Blaze RYDR".

Electri_cation of 2 wheeler vehicles in India have gained pace in creating a new high-growth segment. JK Tyre is catering to this segment through a new range of speciality products "E-BLAZE" focusing on Low Rolling Resistance and high load capacity. In terms of OEM partnerships, "Blaze RYDR", our flagship sub-brand, is the preferred OEM choice in TVS Apache and TVS N-torq. We also have presence in the economy & executive range of bikes & scooters for Hero, TVS & Bajaj.


Growth in tractor sales in India, along with support from the government for the farmers, enabled handsome growth for the Farm Tyre segment, with strong support from JK Tyre Xpress Wheels around the country. To make Indian farmers future-ready for Sustainable Agriculture & adoption of new technologies, JK Tyre has always taken the lead. JK Tyre has taken several steps to gain market share in the segment i.e. row Crop & Puddling tyre offerings to farmers for special farming application.

Continuous customer engagement programme "Kisan Mitra" and regular ground work by the field team has helped JK Tyre to penetrate deep in rural areas in country. With digitalization gaining prominence in the Agri-sector, JK Tyre has also capitalized in the digital space. Collaborations with leading tractor aggregator platforms to promote the premium range of products has strengthened the brand reach.

O_ The Road

Our domestic O_-the-Road tyre business has experienced healthy growth in the last financial year. With a focus on increasing JK Tyre OTR foot print, we have expanded our retail network in the OTR category. JK Tyre has participated in OTR segment targeted trade fairs such as Excon- Bangalore & Bauma Conexpo - Greater Noida. Many New Tyres were launched at these platforms such as 45/65-45 VEM 63 58PR L5 for Large Wheel loader, 16.00-25 VEM 045 44PR E3 & 12.00-24 Hard Rock Champion 20PR E4 for Mining Tipper Truck & 14.00-24 GTL Champ 16PR G3 for Motor Grader, 26.5-25 Loader Champ 28PR E4/L4 TL for Wheel Loader, 23X8.50-12 JET TRAX ULTIMA 6PR TL and 23X5.7-12 JET TRAX SUPER II 4PR TL for Skid Steer Loader categories. With this, JK Tyre has strengthened its range and ensured its footing in this niche market.

The new OTR tyre range is developed with advanced technology and is designed to deliver increased mileage and exceptional traction in the most demanding situations. Business with leading OEMs has seen healthy growth which has helped to increase engagement with both retail & corporate customers through brand recognition.

With the focus on infrastructure development and looking into the aspirations of the domestic mining, infra & manufacturing sector, the "O_-The-Road" tyre business is expected to grow further in the medium to long term.

Retread Business

JK Tyre completed well over a decade in the Retread business which grew by 30% year on year basis. Brand name of "JK Treads" is now well established as premium brand in retreading industry. Keeping in view of the JK Tyres Customer centric approach & commitment to deliver best in class, JK-Treads introduced a premium range (XFS-Series) having superior low-rolling resistance compound enabling customers to save on Fuel yet get more mileage. Keeping the motto of providing "360? Solution to its Customers", the network of JK Retread Centers (JKRC) was increased to 69, which extends from Jammu in North to Kanyakumari in South & Imphal in East to Gandhi Dham (Kandla-Port) in West. JKRCs are Equipped with ultra-modern Retreading machinery and follow JK Tyre - recommended repair and Retread procedures for Retreading all category of Tyres including Tubeless Radials. JKRC provide comprehensive solutions to Fleets, mobility customers and OEMs to help them to reduce their operation cost.

Service - A Brand Di_erentiator

Digitalization has enabled organizations to provide faster, more efficient and personalized customer service, resulting in higher customer satisfaction and winning loyalty. This was no different for us when we launched our Digital Claim model way back in 2020. Since then, we have been building up and continue to provide "First Visit Resolution" to our end customers within minutes, which earlier in offine mode used to take days. During financial year 2022-23, more than 96% complaints were processed through digital mode involving around 3200 channel partners every month. Adoption of TQM way of working is another lever which has provided us a framework for continuous improvement, reinforced a customer-focused culture, empowered employees and supported data-driven decision making. We are confident TQM will help us in identifying and reducing irritants in customer experience journey with brand JK Tyre. "JK Assure" – a customer friendly warranty policy was well received in the market. We remain committed to providing exceptional customer service and we look forward to continuing to build strong relationships with our valued customers.

Business & Sales Capability Building

All round efforts were made in a sustained and structured manner to enhance knowledge and capability of our front line as well channel partners thus empowering them with superior customer handling skills. New partners underwent a formal onboarding process. The launch of new products was ampli_ed by exhaustive training programs for our channel partners and team members.

Channel Support

JK Tyre continued its efforts to increase it channel presence both quantitatively and qualitatively. JK Tyre has a strong channel footprint of 6500 partners including dealers and distributors. Further, the Brand shop network grew exponentially with an addition of more than 100 outlets covering different formats- Steel Wheels, Xpress Wheels and Truck Wheels. There are currently more than 650 brand shops providing super customer experience and quality service to customers.

Fleet & Mobility Management

Fleet & Mobility Management continued to drive JK Tyres competitive edge in the market. Nearly 250 fleet accounts were added under the fleet management program for direct sales & services from the Company. New Truck Wheel Centres (TWC) opened during the year at key locations on highway, for rendering the best in class tyre maintenance service. This has taken the total count of such TWCs to 79, which is the widest network by any Tyre manufacturer. With digital support, over 200 JK Tyre Pit Stops were made operational on key routes to extend the first-hand services like puncture repairs, air top up etc. to fleets on cashless basis.

It is heartening to note that Leading fleets in the industry joined the JK Tyre Mobility Solutions programme.


2022 was special for JK Tyre as the Company celebrated the 25th year of its National Racing Championship. Four successful rounds of the

JK Tyre-FMSCI National Racing Championship were held at the race track in Coimbatore and the national champions were felicitated in a gala ceremony. As part of our ongoing endeavor to promote motorsport in the North East, we hosted the eighth edition of the JK Tyre Orange 4x4 Fury — one of Indias foremost off-roading events. The off-roading spectacle was the flagship event of the world-famous "Orange Festival of Adventure and Music" in Dambuk, Arunachal Pradesh. The JK Tyre _ag _ew high along with those of G-20 nations when the 9th edition of the JK Tyre Himalayan Drive was strategically added in the G20 festivities in West Bengal and was endorsed by the Govt of India. It was hosted alongside the meeting of 2nd Tourism Working Group (TWG) under Indias G20 presidency which was inaugurated in Siliguri, West Bengal was _agged off by Honble

Minister of Tourism Shri G Kishan Reddy, Ambassadors of ten G20 nations and representatives of 29 countries. The rally has been able to showcase North Bengal as a premier destination for Adventure Sports in the country which was also the theme of the G20 discussions that highlighted the best practices, success stories, prospects, in the field of Adventure tourism. The three-day rally put both driving and navigation skills to a very tough test as the competitors waded their way through rocky river beds, beautiful tea gardens, dirt and gravel tracks and were a part of the G20 celebrations in Sikkim. The rally post the _ag-in in Darjeeling moved in a convoy carrying G20 _ags. Present at the prize distribution ceremony that was hosted at The Mall in Darjeeling was Chief Co-ordinator of the G20 Secretariat, Shri Harsh Vardhan Shringla as the Chief Guest. Our Brand Ambassador and Arjuna Awardee, Gaurav Gill kept the Indian _ag _ying high at the World Rally Championship (WRC) with his exceptional performance. As an active supporter of Women in Motorsport, JK Tyre along with WIAA successfully hosted the Womens Rally to Valley event, witnessing a participation of over 200. The JK Tyre Times Womens Drive from Delhi to Agra was also successfully conducted, witnessing over 350 participants. As a strategic move to enhance the brand journey towards premiumization, we ventured into Drag Racing, a format of motorsport popular amongst Super Cars and Super Bikes. The event held in Hosur, Bangalore witnessed over 800 participants. JK Tyre continued spearheading the development of young talent in the country, with new additions to the growing repertoire of JK Tyre Motorsport family, with our stalwarts performing admirably in the domestic and international championships. As a result of ongoing efforts JK Tyre Motorsport was recognized with " The Motorsport Award of the year " by "Car - BiKe"

Road Safety

JK Tyre continues to be a torchbearer in terms of promoting road safety awareness for the past three decades and is recognised as a stakeholder by authorities. Of the 4 Es in road safety JK Tyre focus was on education and continued its drive to spread awareness on road safety starting with particular emphasis on tyre safety with various interventions for drivers and training for police personnel. At the highest level JK Tyre emphasised on safe driving by successfully organizing the 8th edition of the JK Tyre Constitution Club of India Car Rally for Parliamentarians 2023 in New Delhi. The event had Honble Speaker of Lok Sabha Shri Om Birla as the chief guest for _ag-o_ as well as Union Ministers Shri Anurag Thakur (Minister of Sports), Mrs Nirmala Sitharaman (Minister of Finance), Dr. Harshvardhan (Member of Lok Sabha) amongst others. The cause was further supported by the Honble Minister of Road Transport & Highways Shri Nitin Gadkari who graced the prize distribution ceremony as the Chief guest along with many parliamentarians.

International Sales

Exports at JK Tyre

The export business of our Company continued to remain robust and witnessed growth in the first 3 quarters of financial year 2022-23. With the increasingly challenging Geo Political scenario & economic headwinds, distributors across markets focused on rationalizing the level of inventory they were carrying thereby impacting exports in the last quarter of financial year 2022-23. We however noticed revival of demand from the end of financial year 2022-23 and given our strategy of constantly introducing technologically advanced products and improving our service to ensure customer delight, we continue to gain immense traction. In addition, we are strengthening our presence in focus markets like Middle East and the Americas where "Brand JK Tyre" enjoys a high level of acceptance.

We are confident of exports continuing to make a positive contribution to the Companys overall performance.

Manufacturing Excellence At JK Tyre

At JK Tyre "Manufacturing Excellence" is, continuous improvement of operations to reduce waste, increase product profitability and gain a winning edge with quality and safety innovation. At JK Tyre, excellence has been at the core of our thinking, innovation, operations and business practices for many decades. We have been a committed proponent of sustainable practices ever since we came into the business. In addition to fixing targets directed at excellence, we place an equal emphasis on commitment to deliver quality and consistent product to the customer. This is what we profess, practice and propagate - through ground level initiatives. E_orts involved to excel in the manufacturing process at all locations have been recognized at different forum by several institutions. Some of them are:

E "FAME International Environment Commitment Initiative award" under Platinum category

E "Grow Care Safety award" for best practices in OHS

E "CII National Award" for Excellence in Water Management 2022.

E "Manufacturing Today" - CSR Award under Large Category

E "National Energy Award" for Excellence in Energy Management 2022 by CII

E "SEEM National Energy Management Award 2021 (SNEMA 2021)" under Platinum Category

E "RoSPA Bronze Award" for Health and Safety for 2022 from the Royal Society for the Prevention of Accidents, U.K.

E "Global Sustainability Leadership Award 2022" by World Sustainability

E "Most Iconic Manufacturing Industry 2022" from World Manufacturing Congress

The Company has been committed for the past many years to energy conservation, waste reduction & water conservation. The commitment is transformed into a great initiative of being Green and Clean Company with sustainable use of energy. JK Tyre as a Company is also committed to our goal of Energy- Reduce Recycle Reuse and becoming the 1st Green & Clean tyre Company of India. Our efforts are showing some encouraging results. We, at JK Tyre, are very proud to share that our specific water consumption is at world benchmark in the industries and still efforts are pushing in this journey to reach new milestones.

While continuously raising the bar ourselves, productivity and consistency remains the key challenge for the team.

Financial Performance

Year Ended Year Ended
31-Mar-23 31-Mar-22 31-Mar-23 31-Mar-22
Standalone Consolidated
Sales 9,538 7,918 14,520 11,853
Other Operating Income 80 114 125 130
Revenue from Operations 9,618 8,032 14,645 11,983
Operating Profit (EBITDA excluding Other Income) 775 701 1,297 1,072
Other Income 32 30 37 37
Less: Finance Costs 258 230 454 419
Less: Depreciation and 243 241 407 385
Amortisation Expense
Profit before Exceptional 306 260 473 305
Items and Tax
Add: Exceptional Items (36) 4 (62) 4
Profit before Tax 270 264 411 309
Less: Provision for Tax 86 81 146 109
Profit after Tax 184 183 265 200
Add: Share in Profit / (Loss) of Associates - - (2) 1
Profit for the year 184 183 263 201

Your Directors are pleased to report a year of highly successful operations. JK Tyres, both topline and bottom line continued on growth trajectory, despite high input costs during the first half of the year. Focus on sales growth enabled a jump of 22% resulting in the highest ever Turnover of Rs. 14,681 crores by JK Tyre. Strategic interventions, higher operating efficiencies and good performance of subsidiaries helped Operating Profit increase by 21% and a higher net profit which grew by 32%.

JK Tornel

JK Tornel, Mexico recorded an all time high turnover which is 6546 Millions Pesos a growth of 13% over previous year inspite of the challenging market situation in the Americas. Operational efficiencies were enhanced by consolidating production lines. Further more conversion of dollar loans to peso loan from local Mexican banks will help reduce financial costs. In addition, innovative marketing efforts resulted in higher market presence both offine and online which was also well recognized. JK Tornel continued to dominate the Passenger Car Radial market and is poised for higher growth.

Cavendish Industries Ltd.

Cavendish continued to significantly contribute to the overall performance results and recorded all-round growth with highest ever Turnover of Rs. 3,869 crores, an increase of 29% over the last year. Production was also at its all-time high across product categories. On the energy front significant drop in power and steam consumption were recorded. Many new sizes were taken up for production for both domestic as well as export markets. Good capacity utilization, with better operational efficiencies and stable raw material prices, augur well for the future.

R&D and Technology

The thrust on R&D and technology enabled JK Tyre to travel on the path of innovation, productivity, process improvement, sustainability, global competitiveness, material substitution, cost optimization, regulatory requirements and green manufacturing across all our facilities. We continued with our ‘Cradle-to-grave approach to deal with sustainability challenges and providing end to end solutions to our customers. Our sustainable material research is focused on two major categories: Bio-sourced and Recycled / Renewable/Regenerated material. Our constant endeavour is to use more and more bio-based material that includes rubber, filler, processing aids, etc. We are at the forefront of deploying recycled / renewable/regenerated material, without compromising tyre performance. Improvements in various energy intensive manufacturing processes not only helped to reduce energy consumption but also improve product quality & performance owing to the homogeneous distribution of filler particles in the rubber matrix.

The ever-increasing requirement for improvement in vehicle fuel efficiency that leads to continuous reduction in tyre rolling resistance is a major challenge. Further, improvement in tyre wear resistance (mileage) is also required to be met from the viewpoint of minimizing resource usage. We are utilizing new generation materials such as Carbon Nano Tubes, Graphene, Nano Clay etc. that enabled us to achieve our target for various performance parameters to address the sustainability requirement.

We continue to incessantly work towards establishing the 6R strategy through various in-house research projects. We have successfully implemented use of different recycled materials in our commercial products. Various design measures have also been taken to improve tyre retreadability.

The ongoing dynamic system of Value Engineering & Product Improvements continued to yield significant cost savings. The underlying thrust on digital technologies enabled streamlining complex processes to increase reliability, end-to-end traceability, consistency and productivity improvements.

Raw Material

Financial year 2022-23 has been a year of both opportunities and challenges. In financial year 2022-23, the demand not only recovered from the pandemic set-back, but also, surged beyond the industrys expectations. Restricted availability has been a concern for several years now, largely caused by sudden surges in demand, leading to price increases and affecting profitability of the tyre manufacturers. Adding to the problems, the shipping situation has been highly volatile on both cost & delivery front. The congestion at ports and the resulting backlog, is rendering carriers unable to meet their delivery commitments, making it difficult for the manufacturers to get materials on time. Further more Substantial dependence on imports, adds risk to the business. Enhancing both efficiency & effectiveness of the chain, while maintaining the sustainability standards was thus a focus area. Dedicated programmes were adopted to addressing the emerging challenges, which started with a structured Risk Mitigation drive for reducing dependency on single source & single site, suppliers which involved spreading the sourcing base to different geographies. Closer collaboration with suppliers enabled superior efficiencies. We also conduct a series of supplier engagement events, which includes training on skill-development, yield-improvement, lean six-sigma principles and a common platform for co-sharing & co-learning on best practices for material-safe keeping and TQM principles like Poka-yoke.

In addition, there were various initiatives on de-risking the logistics volatility & containing the cost of operations. Initiatives like switching from seaports to discharge at ICD, helped in dodging over the impact of congestion at main sea ports, while, initiatives like switch from conventional roadways to multimodal transportation on long-domestic routes, helped in cost savings. With continuous & synergized efforts, we were able to prevent shortages of inputs, while containing costs.

Human Resource - Management & Development

For JK Tyre, people are central to driving the Companys competitiveness as they are integral to our sustainable business growth. JK Tyre has consistently focused on recruiting and onboarding the best talent from industry with the objective to generate superior performance. In line with our core value, "Caring for People," the Company continued to nurture a supportive and a safe working environment. The Company firmly believes that talented and engaged employees are critical differentiators as they provide competitive advantage for sustaining and growing the business. Our consistent focus has been to hire the best-in-class talent from various campuses as well across industries. Our Learning and Development Philosophy is to prepare our organisation for future challenges. Accordingly our talent is nurtured and through well structured programs including curated MDPs at leading business schools. These enhance the competencies of our employees thus empowering them on their journey of growth. Based on periodic feedback and surveys employee friendly policies have been put in place to ensure greater employee satisfaction. High level of Employee engagement is maintained through various programs, many of them which entail a high level of involvement with the families. No wonder JK Tyre continues to be a ‘Great place to Work and is well recognised not only within J.K. Organisation but at various industry fora.

Corporate Social Responsibility

JK Tyre has always been committed to nurturing the surrounding environment to create sustainable societal value in addition to generating wealth for its shareholders. The empowerment of communities plays the most significant role in their development and therefore the Company has initiated many projects for empowering people through skill development, livelihood enhancement, improved agriculture, livestock development, water conservation, etc. While planning a CSR project or selecting beneficiaries, emphasis is given to poor and marginal people, vulnerable sections of society, women, old age people and children. We feel pleased to mention that through our diverse CSR initiatives, we have impacted lives of around 11 lakhs people till date. JK Tyre CSR initiatives were recognized at Indian Chamber of Commerce Social Impact Awards 2023 for Eradicating Hunger

& Poverty through Livestock Development at Morena, MP & Mysuru, Karnataka.

Risks and Concerns

JK Tyre recognizes the importance of effective risk management while achieving our business objectives and ensuring sustainable growth. We have implemented a robust risk management framework that encompasses identifying, assessing, mitigating and monitoring risks across all aspects of our operations. Our risk management strategy is aligned with the Companys overall objectives and ensures that we maintain a proactive approach to risk management.

The Company has identified various risks under the domain of financial, operational, sectoral, ESG, IT & cyber security. We have put in place measures to mitigate these risks including investments in technology and cyber security. Quanti_cation of the severity of these risks are being done based on probability of their occurrence and the likely impact on the business.

Furthermore, we continuously monitor the effectiveness of our risk management strategies and make necessary changes as required. Risk management is being driven in the Company with strong well-established structure in place with internal risk management committee and Board level risk committee.

Key Business Risks

Uncertain Global Economic Scenario

We recognize that changes in the global economic environment, such as currency fluctuations, trade restrictions and geopolitical tensions, can significantly impact our exports and overall business performance. To mitigate the risks associated with these factors, we have adopted a proactive approach to manage our exports. We have diversified our export markets and product portfolio, reducing our reliance on a single market or product category. We also work closely with our customers to understand their requirements and anticipate changes in demand. We also monitor the global economic environment closely and make necessary adjustments to our operations and strategy.

Foreign Currency Risk

The Company recognizes foreign currency risk as a significant risk that can impact our business performance especially when the fluctuation in global currency market is quite high. We are exposed to foreign currency risk due to our exports and operations in different countries,and overall international business. To mitigate the impact of foreign currency risk, we have implemented a comprehensive risk management strategy. This includes the use of financial instruments, such as hedge against currency fluctuations through forwards/ options after considering natural hedge available to the Company with the mix of exports and imports, as and when the requirement arises. We also closely monitor exchange rates including consulting regularly with forex advisors and banker on the matter and adjust our hedging strategy accordingly.

Regulatory Changes (End of Life Tyre)

The Company recognizes the potential risk associated with regulatory changes in the end-of-life tyres (ELT) market. The ELT market is subject to regulations that govern the disposal, recycling and reuse of end-of-life tyres. Any changes in these regulations can significantly impact our operations and profitability.

To mitigate this risk, we have implemented a proactive approach to monitor and assess regulatory developments in the ELT market. We work closely with industry associations and regulatory bodies to stay informed of any changes to regulations and assess their potential impact on our operations.

We are working technologically to reduce the ELT impact through increased use of regenerated material in our manufacturing including reclaimed raw material. Our proactive approach to risk management of possible regulatory changes in the ELT market has allowed us to minimize the impact of any potential regulatory changes on our operations and profitability. We remain committed to maintaining high standards of risk management and adapting to future challenges.

Supply Chain Risk

Tyre industry is highly dependent on the supply chain to ensure timely delivery of raw material, components and finished goods as well. The said risk has reduced significantly compared to previous few pandemic hit years. Availability of containers has improved and the freight cost has also normalized. However, Company is conscious of these risks and has implemented measures to mitigate them, including supplier diversification, inventory management and contingency planning. These actions have helped the Company minimize any negative impact due to supply interruptions. Company is also investing in digital technologies to enhance supply chain visibility and agility, enabling it to respond quickly to any disruptions. We have implemented transport management system to enable complete tracking of real time logistics of outbound material. This provides us opportunity to analyze and take timely corrective actions to improve supply chain and reduce cost. Regular network optimization also helps us redesign our supply chain.

Cyber Security

As companies are increasingly adopting digital technologies, they are becoming more vulnerable to cyber security risks. JK Tyre is also increasingly adopting digital technologies in its operations and reaping benefits. In order to mitigate the risk related to cyber security, Company has implemented robust security measures, vulnerability assessments, best practices being adopted across the industries. Back up of critical data and regular reviews of disaster recovery center is being conducted. Company has adopted XDR platforms (Extended Detection and Response) and MDR services (Managed Detection and Remediation) to improve mitigation capability in companies digital systems.

Internal Control Systems

The Company has since its inception, laid down a system of internal control, which is commensurate with the size and nature of the business. Adequate and effective checks have been put in place to ensure that the financial data is accurate and reliable. The internal control systems also ensure that the assets and the interest of the Company are well protected.

The internal audit was carried out throughout the year based on a systematic plan covering all functions and aspects of the business. The internal audit reports were reviewed by the senior management and were placed before the Audit Committee of the Board of Directors along with the actions taken. The Audit Committee undertook a detailed review of the audit observations and actions in order to ensure that the internal audit system was functioning effectively. The recommended actions by the audit team were monitored and improvements were implemented that were regularly reviewed by the senior management. The IT framework of the Company is based on a robust ERP system, ensuring seamless connectivity of plants, sales offices and head office and facilitating faster and more reliable processing of transactions as well as generating reports for rapid decision-making. The Company also has strong control and management reporting systems. In addition, continuous business projects are periodically undertaken.

Cautionary Statement

The Management Discussion and Analysis report contains forward looking statements, which may be identified by the use of words in that direction, or connoting the same. All statements that addresses expectations or projections about the future including but not limited to statements about your Companys strategy for growth, product development, market position, expenditure and financial results are forward looking statements.

Your Companys actual results, performance or achievements could thus, differ materially from those projected in such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.