JK Tyre & Industries plans Rs 1,100 cr capex till next FY

CFO of JK Tyre and Industries, Sanjeev Aggarwal, told the media that the company had planned a capital expenditure (capex) of Rs 1,100 crore until the next financial year (FY).

The company plans to invest in capacity expansion and regular maintenance of the existing infrastructure.

Aggarwal said that the total spend in the next two years would be Rs 1,100 crore, including maintenance capex of around Rs 300 crore.

Around Rs 530 crore capex will go into the passenger car radial (PCR) capacity expansion project. It has also lined up the capacity expansion of truck bus radial (TBR) at Cavendish Industries.

Currently, the projects are TBR capacity expansion for Rs 236 crore and the PCR capacity expansion for Rs 530 crore. Besides, there is the maintenance capex of about Rs 150 crore on annual basis, which is Rs 300 crore for the next two years.

Aggarwal said that the PCR capacity expansion at the Banmore plant in Madhya Pradesh would be funded through debt and internal accrual.

The expansion will result in a 35% increase in PCR production which is around 90 lakh tyres per annum.

Managing Director of JK Tyre and Industries, Anshuman Singhania, said that the Board has already approved the PCR capacity expansion project at Rs 530 crore at the Banmore tyre plant. The expansion plan and the debottlenecking program will result in a 35% PCR capacity growth.

He said that the proposed expansion will become operational by December 2023. Singhania said that the company sees a strong demand growth across all market segments, with improved economic sentiments, record agri output and improved realisation in the country.

He said that with the expected moderation in inflationary pressures and improved geopolitical sentiments, automotive and tyre demand should improve.

He added that robust infrastructure spending by the government would continue to improve the commercial vehicle (CV) segment demand in the coming years.

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