There is a lot of opportunity for JK Tyre in developing countries: Raghupati Singhania

Domestically we believe it is better to expand our plant as it’s more economical and we have land and infrastructure available. We can afford to do so for some time, once we are exhausted we can consider some new locations. Internationally we are expanding our Mexico plant and are tying up with financial arrangements. We do not have any immediate plan for acquiring internationally but if a good opportunity comes in a developing world we will look into it. There is a lot of opportunity in developing countries in the Southern hemisphere for the future. Africa is still very poorly grown so is South America to an extent.

The Capex will be used for expanding the capacities. A chunk of the investment will go into the expansion of passenger car radial capacities and some portion will go to truck bus radial expansion. In R &D in the last few years, we have been investing ₹85-100 crore a year and that thrust will continue as we are very committed. 

We are working on tyres that provide mileage with fuel economy on product and development side and will introduce products that offer better value propositions that are a little bit more premium in the market. We introduced puncture tyres guard technology to the country recently. Our focus is to have products that provide mileage with safety and in-car driving comfort, noise vibration, and handling steering. 

We are supplying EV tyres to major bus manufacturers and they are operating a complete fleet in Delhi. We are also working with other manufacturers to provide them with tyres but each vehicle has its requirement. We have to custom design the tyres as to what works for one EV bus may not work for another. We are supplying two-wheeler EV tyres to eight manufacturers and in every category, we have to tweak the product to match the requirement. 

We have just started the pilot and will expand it in the country. Dial-a-tyre was introduced 15 years back with the company providing a number to call and the tyre would be delivered to your house. We did a pilot in one city and did not find much of a pick-up. However, habits are changing and people are constantly working. They do not have time to pick up groceries so this personalised service will now be more acceptable. We have restarted it and it should have a good future.

A consumer does not have to go to a tyre shop, sitting at home you can dial a number and the company’s vehicle will come and fit the tyre.

Rubber prices have moderated and will be stable. We do not see any extraordinary rise apart from seasonal factors. As far as other raw material pricing are concerned it is based on petroleum prices and it will depend on how that will shape up. There was a dip in oil prices, we have to see how far they have sustained. The impact will be seen in one or two quarters in the next five to six months. 

No. We have a huge carry forward as there was a 40 per cent increase in raw material prices that translated into 28 per cent in selling prices and we could increase barely a little more than half of it. There is a drag effect and the entire industry’s EBIDTA margins have shrunk from what they were in the previous quarter because of this. We have to come back to a little bit of normalcy to fund our growth and development. We require price revisions but how much we will be able to do depends on the competitive market conditions.

We have added value propositions to the customers, backed by performance and more viability of the product and we reached out to create more brand shops. We have a chain of nearly 400 brand stores and are increasing our products to have a wider reach. 

It should be a focused and growth-oriented budget. We are at a cusp of a very interesting time as a country and economy. Perhaps we are the only bright star in the global arena. All economies are shattering and we have a decent growth of 6 per cent.