INDUSTRY PROFILE

TYRE INDUSTRY OVERVIEW

In Indian tyre industry, capacities are concentrated in the hands of a few large
players with top four tyre companies accounting for over 77 percent of
industry market share. On the positive side it is estimated that there would be a
volume growth of 12-14 percentage in 2009-10. The performance of the tyre
industry is linked to the automobile and infrastructure sectors, the growth
which is dependent on the performance of the economy; the current estimated
economic growth is over 8.6 percentages. The continuous thrust being placed
by the Government on the development of infrastructure, particularly roads,
agriculture and manufacturing sectors, would lead to impressive acceleration
in the automobile, ultimately generating more demand for tyres.

The tyre industry in India appears to be on verge of changes due to the process
of Globalization.

However the tyre companies face immense competition together with price
and cost pressures, pricing pressures, from OEMs because of their high
bargaining power and in the replacement market due to huge competition.
Companies are now giving importance to innovation in product and process
advanced technology and operational efficiencies and so on. Some foreign
companies are making efforts to establish manufacturing unit in India by
setting up joint venture to local market demands as well as for a buyback. The
tyre companies would definitely show their improvements in the margins
sequentially. The 2/3 wheeler industry also witnessed substantial growth in the
period under review; there has been a marked shift in consumer preferences
from mopeds and scooters and also toward motorcycle. But then, it would be
highly dependent on the prices of major raw materials are Rubber, Carbon
Black, and NTC Fabric. The continuously rising trend witnessed in the prices
of RM remains an area of concern. The trend is very volatile and the future
pundits expected the prices to go increase from the current levels.

MARKET PROFILE

While the tyre industry is mainly dominated by the organized sectors, the
unorganized sector holds sway in bicycle tyres. The major players in the
organized tyre segment consist of MRF, Apollo Tyres, Ceat and JK Industries,
which account for 77 per cent of the organized tyre market. The other key
players include Modi Rubber, Kesoram Industries and Goodyear India, with
11 percent, 7 per cent and 3 percent share respectively. Dunlop, Falcon, Tyre
of India Limited (TCIL), TVS-Srichakra, Metro Tyres and Balkrishna Tyres
are some of the other players in the industry. MRF, the largest tyre
manufacturer in the country. It has strong brand equity. While it rules supreme
in the industry. The Indian tyre industry is two tiered; Tier-I players [top 5 tyre
companies], account for over 77percentage of industry turnover and have a
well diversified product-mix and presence in all three major segments, are
Replacement market, Original Equipment Manufacturers (OEM's) and
exports. Tier-II companies are small in size, mainly concentrating on the
production of small tyres [for 2/3 wheelers, etc.]. Tubes & flaps and the
replacement market.

INDUSTRY SEGMENTS

Vehicle categories
Tyers for vehicles in commercial usage
Tyres for vehicle for personal use.

Tyre market
Original equipment manufacturer[OEMs]
Replacement Demand
Exports.

Tyre designs
Cross-ply tyre
Radial tyre.

SECTOR SPECIFICATIONS

The tyre industry is a major consumer of the domestic rubber production.

Natural rubber constitutes 80 percentage of the material content in Indian
tyres, synthetic rubber constitutes only 20 percentage of the rubber content of
a tyre in India. Worldwide, the ratio of natural rubber to synthetic rubber is
30:70. Apart from natural and as well as from synthetic rubber, rubber
chemicals are also widely used in tyre manufacturing process. Most of the
RSS-4 grade natural rubbers required by the Indian tyre industry is
domestically sourced. With only a marginal amount being imported. This is an
advantage for the industry. Since natural rubber constitutes 25 percentage of
the total raw material cost of the tyres.
The two types of synthetic rubber used in tyres are Poly Butadiene Rubber
(PBR) and Styrene.

Butadiene Rubber (SBR). The former is used in most of the tyres, while the
latter is mainly used in the radials for passenger cars. Synthetic rubber
accounts for 14 percent of the raw material cost. Unlike in the case of natural
rubber. India imports 60 percent of its synthetic rubber requirements. Apart
from rubber, major raw materials are like nylon tyre cord and also carbon
black. The former is used to make the tyres strong and impart tenacity to it.
The latter is responsible for the colour of the tyre and also increase the life
span of the tyre. Nylon tyre cord comprises 34 percent, while carbon black
accounts for another 13 percent of the raw material cost. In India, the carbon
black used is of the N660, N220 and N330 variety.

HISTORY

The origin of the Indian Tyre Industry dates back to 1926. When Dunlop
Rubber Limited set up the first tyre company in West Bengal. MRF
followed suit in 1946. Since then, the Indian tyre industry has grown Fastly.
Transportation industry and tyre industry go hand in hand as the two are
interdependent. Transportation industry has experienced 10percentage growth
rate year after year with an absolute level of 870 billion ton freight. With an
extensive road network of 3.2 million km, road accounts for over 85% of all
freight movement in India.

The tyre industry has witnessed a CAGR of 8.3% over the last decade mainly
by the strong growth in the domestic auto industry. Though the replacement
market has driven the industry growth for long period, the OEM market has
seen a growth over the last two years. The industry is highly capital intensive,
as it requires around Rs4bn to setup a radial tyre plant with a high capacity of
1.5mn tyres and around Rs1.5-2bn for a cross-ply tyre plant of a capacity to
manufacture 1.5mn tyres. The raw material to sales ratio in the Industry is
around 65percent. The industry has high entry barriers because of, its capital
intensive nature and low operating margins. With demand increasing at a
steady pace. The industry is expected to go through a consolidation phase. The
industry is dominated by four players are MRF, Apollo Tyres, JK tyre and
Industries and Ceat and enjoys more than 77percent of the total market share.
The fortunes of the industry are linked to the trend in the domestic auto
industry, retreading, trend in road transportation and spending on road
infrastructure. The companies have lined up further expansion plans to meet
the increasing demand as well profit.

OUTLOOK

The capacity level of the Indian Tyre Industry has been increased 80percent in
the last two to three decades, by healthy growth in automobile sectors. Most of
the companies or industries have announced aggressive expansion plans to
meet the demands for tyres in future, which is according to CARE Research.

GROWTH OF TYRE INDUSTRIES IN INDIA

The Indian tyre industry is expected to clock a tonnage growth of 9-10 percent
over the next five years. According to a study by Credit Analysis and Research
Limited [CARE], a noted rating firm that offers a wide range of rating and
grading services across sectors, while the trucks and buses tyres are set to
register a CAGR [Compounded Annual Growth Rate] of 8 percent, the LCV
[Light Commercial Vehicles] tyres are poised for a CAGR of 14 percent.
According to the CARE study. The growth in the Indian tyre industry will be
fuelled by the expansion plans of the automobile companies or industries,
Government's focus on the development of road infrastructure and also
sourcing of auto parts by the Global Original Equipment Manufacturers.

However, the tyre industry has to grapple with raw material price volatility,
rupee appreciation and cheap like Chinese imports. The tyre industry in India
recorded a CAGR of 9.69 percent during 2002-07. The size of the industry
was estimated at Rs 25000 crore in 2009-10 with a total production of 971
lakh units of tyres. The study points out that on the export front. The Indian
tyre companies need to explore their markets as the existing market for bias
truck tyre which accounts for about 45 percent of the total export volume is
nearing saturation. This apart, with rationalization catching up in the foreign
markets, The Indian tyre industries need to graduate to radial tyres so as to
protect their share in the export market,

At present radicalization of tyres is low in India except for the car tyre market,
where 95 percent of the tyres are radicalized while cross ply tyres is preferred
in all other types. Cross-ply tyres are preferred owing to poor road conditions,
overloading in trucks, higher cost of radial tyres and poor awareness among
the tyre users in the country. As per CARE report observes that though the tyre
technology in India has witnessed several developments with continuous
innovation and creation, the domestic tyre manufacturers still lag behind their
Global counterparts in terms of product differentiation. Global tyre makers
offer a wide change of products like tyres with pressure warning systems, run
flat tyres, eco-friendly tyres and energy efficient tyre. It is most important to
consider all of these impacts to ensure that the waste management approaches
do not simply result in the transfer of impacts to a different stage in the life
cycle, or to a different environmental medium, and result in greater overall
impacts.

COMPANY PROFILE

BACKGROUND OF JK TYRE AND INDUSTRIES LIMITED

JK Tyre & Industries Ltd is an Automotive Tyre, Tubes and flaps

manufacturing company based in Delhi, India. The name JK is derived from
the initials of KAMLAPATJI [1884-1937] and his father SETH JUGGILAL
[1857-1922]. The company is the market leader in Truck/Bus Radial tire in
India and is the only tyre manufacturer offering the entire range of 4 wheeler
radial for Trucks,buses and Cars. Jk Tyre has a worldwide customer base in
over 80 countries across all 6 continents. It is a part of J.K. Organization group
of Companies. JK Tyre acquired Mexican tyre major- Torne in 2008. With
production facilities in all 9 plants, total production capacity is almost 20
million tyres p.a.

MILE STONES OF JK TYRE & INDUSTRIES

1974- JK Tyre founded in West Bengal with an industrial license in

February 1974 for the manufacture of 40000 nos. each. Automobile
tyre and tubes per annum. The company was converted into a public
limited company on 1 April 1974. The manufacturing project was
promoted by Straw Products Ltd and J.K. Synthetics Ltd.
1982- The companys technical collaboration agreement with General
Tire
 1987-The overall working resulted in substantial profits despite a 51-
days strike as well as go-slow from 14 October.
1988- New steel radial tire for Maruti Gypsy and Tata Motors were
introduced.
1989- Sem-lug Nylon Truck tyre, a new patterns and sizes of tyres
were introduced.
1991- Handeep Investment, td., Hidrive Finance Ltd., Panchanan
Investment Ltd., and Radial Finance Ltd., J.K. International Ltd.,
1992- Opening of office in Moscow besides starting companys
subsidiaries in U.K & Hong Kong.
1993-New radial tyres Brute and Ultima were introduced. The
company in the process of developing steel belted radial tyres for
Mercedes Benz, Peugeot, Daewoo race and Opel Astra. A new pattern
developed for bus and trucks PE-T8.
1994-the T-rated Ultima tyres launched for new generation cars found
in DCM Daewoos ceilo. J.K. Steel radial chosen for Mercedes Benz
India.
1996-jet Drive XS, the widest nylon car tyre for Maruti 800 launched.
Radial category, Ultima XR radial, a terrain tyre introduced.
Introduction of Indias first and only H-rated ultima Xs specially for
Mercedes-Benz Cars.
2000-JK tyre and Indian Oil Corporation entered into a marketing
alliance for installing digital air pressure gauge and sitting up sales and
services outlets at IOC petrol stations in India.
2001-Raghupati Singhania managing director of JK Industries has
appointed the 19th Chairman of Automotive Tyre Manufacturers
Association.
2002- CRISIL assigned a P1+ rating to the Commercial Paper program
of the company.
2003-Mr Ajay Kapila appointed as the marketing director. Divested its
wholly owned subsidiary called J.K. Drugs and Pharmaceuticals Ltd to
TEVA Pharmaceuticals of Israel.
2004-Securities delisted from Delhi Stock Exchange Association Ltd
(DSE).
2007-Name of the Company changed from J K Industries Ltd to JK
Tyre & Industries Ltd.
2008-The company has issued rights in the ratio of 1:3 at a premium of
Rs.75 per Share.
 Total Control (Worldwide)

Public
Type (BSE: 53007)

Industry Tyres, Tubes, Mudflaps

Founded 1874
Founder Lala Juggilal Singhania
Lala Kamlapat Singhania
Hari Shankar Singhania
Headquarters New Delhi
Key peoplr Raghupati Singhania, Chairman
Vivek Kamra, President
Revenue Rs.6015 crore(US$890 millon)
(FY 2012-13)
Net income Rs.1.06 billion (US$16 million) (FY
2012-13)
Number of employees ~5010 (as on 3 Sept 2013)
Website www.jktyre.com

NATURE OF BUSINESS

VISION, MISSION AND QUALITY POLICY

VISION STATEMENT

To be amongst the most admired companies in India Committed to

Excellence.
MISSION STATEMENT

To be a customer obsessed company Customer First 24*7

No.1 Tyre Brand in India
Be a Green Company
To be a large and most Profitable tyre company in India
To retain No.1 Position in Truck and Bus segment and to be amongst
top 2 in all other 4 wheeler tyres
To excel as a value driven organization
To be the most preferred tyre Brand in India
Enhance global presence through Acquisition/JV/Strategic
Partnerships.

POLICIES IN JK TYRE

Quality Policy:

The people of JK Tyre have an organizational committed to Quality in

everything they do. They continuously anticipate and understand customer
requirement, convert these performance standards for their product and
services and to meet the standards every time

Certificate of Quality:

ISO 9001
QS 9000
Environment Management System(ISO 14001)
ISOATS 16949
DOT (Department of Transport)
INMETRO (Institute National De materiologia-Brazil0

Total Productive Maintenance Policy:

In JK tyres continuous pursuit on organizational excellence by

maximizing overall plant effectiveness and achieving total customer
satisfaction, weare committed to: Achieve zero breakdowns, zero
defects and zero accidents.
Continuous reduction in cost of production.
Involve all employees in systems and process improvements
through teamwork.
 Create a clean and safe working environment.

Safety and Health Policy:

JK Tyres are committed to:-

Foster safety and health awareness among its employees

through prevent able measures, continuous development,
awareness and improvement in the work environment.
Adhere legislation and Government regulations related to
safety and to health in manufacturing activity.
Safety audits are takes place.
Health checkups.
Improved work practices.
Full participation of employees.

PRODUCT AND SERVICE PROFILE:

The major product of JK Company are automobiles tyre (Nylon tube tyre,
Radial tube and Tubeless tyre) Tubes and Flaps. The company offers an
unmatched choice of patterns and design constructions, catering to the
different needs of its customers.

PRODUCTS

1. Truck Tyre
Jet rid
Vikrant truck king
Star lug
Super T.K
JT. King
Hi lofe
Jet star
Jet truck
Sand cum highway
Truck plus
JT classic
JETRK
 2. Light Truck
Jet rid
Star lug
Fleet king
Truck king

3. O.T.R (Of the road)

VEM 99 E-3 T/L
VEM 99 E-4 T/T
VEM 99 SSE-4 T/L
EGO4G2 T/T

4. Tubes
JK tubes
Vikrant tubes
Tube VEX

5. Flaps
JK flaps
JK RD flaps
JK EXP flap

CLINTS

FLOW CHART FOR TUBE PROCESSING

MASTER COMPOUND
 FINAL COMPOUND

STRAINING

TUBE EXTENSION

VALVE FIXING

SPLICING

TUBE CURING

FINISHING

FINISHED GOODS

TUBE TYRE

AREA OF OPERATION

JK Tyre and Industries, with an area covering 53 acres in Mysuru. The

infrastructure facilities, abundant labour, good transportation facilities,
encouraged the entrepreneurs to select the city of heritage of Mysuru as an
ideal factory location and thus established Vikrant Tyre Ltd.
Today JK tyre products compete with the best International players in
premium International bias market in more than 68 countries in 8 continents.

STATS/COUNTRY LOCATION

Rajasthan Jaykaygram
Rajasthan Kankroli
MP Banmore
Karnataka VTP-1 (mysuru plant 1)
Karnataka RTP-2 (mysuru plant 2)
Karnataka OTR-3(mysuru plant 3)
Mexico Azcapotzalco
Mexico Tultitlan
Mexico Hidalgo

INFRASTRUCTURAL FACILITIES

An Infrastructure facility means the basic requirement that the company

should look after in order to ensure free flow of industrial activities. The
company/industry is providing following infrastructural facilities in order to
satisfy their workers, distributors and customers. [the company provides all
facilities stated by Factories Act 1948]

SHE [Safety, Health, and Environment]

SAFETY

Sec 35 stands for protection of Hazards.

HEALTH

Sec 16 stands for drinking facility.

Sec 19 stands for rest room facilities.
Sec 46(1) stands for canteen facilities.

ENVIRONMENT

Sec 45 stands for Ambulance.

Sec 43 stands for first aid-appliances. [Occupational Health Centre]

COMPETITORS
 National Market
MRF
Bridge Stone
Ceat
Apollo
Falcon
International Market
Good Year
Copper
Michelin
Sumitano
Pirelli

AWARDS

1. JK Tyres ranked16th largest company in the World.

2. SAP ACE award 2014 by SAP India in the category of Special Jury
Recognition in Customer Experience-Sales
3. JK Tyre chosen as a Superbrand for the year 2013-14.

SWOT ANALYSIS OF THE COMPANY

Strategic management is concerned with establishing proper organization

environment fit. It involves watching the organization factors with the
environment factors. Therefore, it involves the organizational factors i.e.
Strengths and Weakness of the organization and also environment factors i.e.
the Threats and Opportunities in business environment. SWOT means analysis
and assessment of comparative strengths and weakness of a business in
relation with their competitors and environmental opportunities and threats
which a company may likely to face.

STRENGTHS
They have wide dealership network
They have built a very good brand name over decades and are
an aggressive company
They have good understanding of customer needs

They are continuously innovating and improving the efficiency
levels
They have successfully received accreditations of ISO 9000
and ISO 14001
They are one of the leading tyre exports of India
WEAKNESSES
Limited market share due to the presence of other major brands
in the segment
Low presence in two/three wheeler segment

OPPORTUNITIES
Emerging markets and improved lifestyle
More tie-ups with Automobile companies as its mainly into
B2B market
Horizontal and concentric Diversification
Improved infrastructure has fuelled more and more
transportation
Emergence of India as a hub for small car production

THREATS
Price wars
Stiff competition from national and international brands
Cheaper technologies
Volatility in prices and availability of raw material as Indias
rubber production is less than its demand
Government policies w.r.t export duties, import duties, tax
levied on automobile industries and economic condition of
nation as it determines the sale of automobiles
Introduction of other transport facilities like metro, monorails
and local trains keeping pollution hazards caused by
combustion of automobile fuels.

FUTURE GROWTH AND PROSPECTS

To be the No.1 Tyre company in India.

To be the largest Tyre export company in India.
To be a customer observed company.
High Quality of Product.
Profit maximization.
 At present, the company has its mother unit at
Mysuru,Karnataka.

FINANCIAL STATEMENT

Mar16 Mar15
12 months 12 months
Sources of funds
Total share capital 45.36 45.36
Equity share capital 45.36 45.36
Share application money 0 0
Reserves 1371.31 1046.12
Networth 1416.67 1091.48
Secured loans 2229.51 2171.55
Unsecured loans 148.46 208.83
Total Debt 2377.97 2380.86
Total liabilities 3794.64 3471.86
 Mar16 Mar15

Application of funds
Gross block 5216.38 4074.32
Less: Accum.Depreciation 1888.98 1719.92
Net block 3327.40 2354.40
Capital work in progress 88.92 697.10
Investments 91.59 92.62
Inventories 739.68 741.62
Sundry debtors 1210.48 1256.19
Cash & bank balance 62.44 100.20
Total current assets 2012.60 2098.01
Loans & advances 832.93 641.83
Total current loans & advances 2845.53 2739.84
Current liabilities 2181.68 2192.76
Provisions 377.12 219.34
Total CL & provisions 2558.80 2412.10
Net current assets 286.73 327.86
Total assets 3794.64 3471.86
Contingent liabilities 100.68 54.35
Book value(Rs) 62.46 48.12

PROFIT & LOSS ACCOUNT OF JK TYRE AND INDUSTRIES

Mar16 Mar15
12 months 12 months
Income:

Sales turnover 6564.92 6784.37

Excise duty 684.49 659.14
Net sales 5880.43 6125.23
Other income 0.79 5.32
Stock adjustments -14.06 -47.40
Total income 5867.16 6083.15
Expenditure:

Raw materials 3400.53 3963.92

Power & fuel cost 238.53 243.59
Employee cost 534.05 459.48
Miscellaneous expenses 702.49 659.11
Total expenses 4875.60 5326.10

Mar16 Mar15
12 months 12 months
Operating profit 990.77 751.73
PBDIT 991.56 757.05
Interest 229.03 240.80
PBDT 762.53 516.25
Depreciation 172.30 139.14
Profit before tax 590.23 377.11
PBT [post extra-ord items] 590.23 377.11
Tax 189.27 123.81
Reported net profit 400.96 253.81
Total value addition 1475.07 1362.18
Equity dividend 56.70 34.02
Corporate dividend tax 11.55 6.93
Per share data [annualized]
Shares in issue [lakhs] 2268.13 2268.13
Earning per shares [Rs] 17.68 11.17
Equity dividend [%] 125.00 75.00
Book value [Rs] 62.46 48.12