JKTYRE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.8

📊 Financials Overview:

• Revenue & Profitability: Quarterly PAT slightly declined from 173 Cr. to 167 Cr., but YoY profit variation is strong (+64.3%).
• Margins: ROE at 9.71% and ROCE at 12.1% indicate moderate efficiency.
• Debt: Debt-to-equity at 0.59 shows a comfortable leverage position.
• Cash Flow: Dividend yield at 0.64% provides modest shareholder returns.

💹 Valuation Indicators:

• P/E Ratio: 27.3 vs Industry PE of 31.0 → fairly valued.
• P/B Ratio: Current Price / Book Value ≈ 3.0 → reasonable premium.
• PEG Ratio: 0.92 → suggests growth is priced fairly.
• Intrinsic Value: Current price (₹485) is near upper range; undervaluation zone closer to ₹380–₹420.

🏢 Business Model & Competitive Advantage:

• JK Tyre is a leading player in the Indian tyre industry with strong domestic and export presence.
• Diversified product portfolio across passenger, commercial, and off-road tyres.
• Competitive advantage through brand recognition and distribution network.

📈 Entry Zone & Holding Guidance:

• Entry Zone: Attractive near ₹380–₹420 (aligned with DMA 200 support).
• Long-Term Holding: Suitable for investors seeking exposure to auto sector growth; moderate returns expected.

Positive

• Strong YoY profit growth (+64.3%).
• Healthy dividend yield at 0.64%.
• DII holdings increased (+0.79%), showing domestic investor confidence.

Limitation

• ROE at 9.71% is below industry leaders.
• PAT declined sequentially (173 Cr. → 167 Cr.).
• Stock trading near 52-week high, limiting immediate upside.

Company Negative News

• FII holdings decreased (-0.02%), reflecting slight foreign investor caution.
• Sequential quarterly profit decline.

Company Positive News

• Strong YoY profit variation (+64.3%).
• Improved domestic institutional investor confidence.

Industry

• Industry PE at 31.0, slightly higher than JK Tyre’s valuation.
• Tyre industry benefits from rising auto demand and infrastructure expansion in India.

Conclusion

⚖️ JK Tyre is a fundamentally stable company with moderate efficiency and fair valuation. While current prices are near the 52-week high, long-term investors may consider accumulating near ₹380–₹420 for better risk-reward. The company’s strong market presence and industry tailwinds support a steady growth outlook.