Record Q2 revenue, but margins, profit and cash flow weaken
JKTYRE · price
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On the reaction day the stock moved 4.0 pts less than Nifty Smallcap 250 and 2.6 pts less than its Tyres & Rubber Products peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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Consolidated Q2 revenue rose 20.7% year on year to a record Rs 4,840.73 crore. Operating earnings before interest, tax, depreciation and amortization fell to Rs 343.14 crore; margin dropped to 7.1% from 13.4%. Profit after tax fell to Rs 65.11 crore from Rs 226.86 crore. First-half operating cash flow was negative. Prior figures were restated after the Cavendish Industries merger, and Q2 included Rs 12.31 crore of one-off costs.
Revenue growth is encouraging, but lower margins, profit and negative cash flow may pressure the stock despite strong domestic demand.