ABOUT THE COMPANIES

JK Tyre & Industries is the flagship company of the JK group headed by Dr R P Singhania as its chairman and managing director. It is one of the leading tyre manufacturers in India and amongst the top 25 manufacturers in the world with a wide range of products catering to diverse business segments such as Truck/Bus, LCV (Light commercial vehicles), Passenger Cars, MUV (Multi utility vehicles) and Tractors.Company is pioneer of radial technology in India and No. 1 Truck/Bus Radial (TBR) manufacturer and 19th Ranked among top tyre companies Globally. It is the 1st company in India with OE fitment of tubeless passenger radials, 1st company in India to launch high-performance H, V and Z-rated passenger radial tyres and even first in India to launch Tyre Pressure Monitoring System (TPMS) based on sensor technology. Company has strong R&D capabilities through its own centre; Raghupati Singhania Centre of Excellence at Mysore. It is Asia's first and India’s foremost highly versatile Tyre / Elastomer Institute with ~200 R&D and Technology scientists.

CEAT was founded in 1924 is one of India’s leading tyre brands and the flagship company of the RPG GROUP. Company offers a wide range of products catering to various business segments such as Scooter, Bike, 3-wheeler, Car, bus, LCV, truck and tractor. The company has significantly invested on tyre testing infrastructure & focuses on upcoming technologies like Electric Vehicle, Sustainability & Smart tyres. Company’s R&D centre is located in Halol, India along with its R&Dofficein Germany and so far company has 140+ Patent filings in its name.Company continues to build its brand 'CEAT' through its association with sports like Women's T20 & football clubs, IPL, WIPL etc. CEAT has sustained association with Rohit Sharma, Shubhman Gill, Shreyas Iyer and Harmanpreet Kaur as the brand ambassadors for CEAT along with actor Karthik Sivakumar.Company has 7 subsidiaries out of which 4 are in India, and 1 in USA, Sri Lanka and Netherlands each. The company has a JV in Bangladesh in 70:30 ratio. It also has an Associated company namely Tyresnmore Online Private Limited.

Business to Business Comparison:

JK Tyre has 40+ years of experience in Tyre manufacturing and it has 11 manufacturing plants with total manufacturing capacity of 35 Mn. Its 8 manufacturing plants are strategically located in Rajasthan, Uttarakhand, Chennai, Mysore and MP. Company also has 3 global manufacturing facilities located in Mexico. The company has 800+ SKUs which includes tyres for passenger cars, tractors, trucks & buses, OTR, 2-wheelers etc. for 25+ OEM Clients such as Maruti, Kia, Tata, Hyundai, JBM, Force, L&T, Ace, TVS, Bajaj, Hero etc. The company is also focusing on preimmunizing of products across its portfolio to generate higher revenue and earn profits in upcoming years.

Ceathas 6 manufacturing facilities and 3 smart facilities in Nashik, Mumbai, Halol, Ambernath, Nagpur & Chennai which possess a capacity of producing a total of 3.5 crore tyres p.a. and company has also planned capacity expansion of Ambernath for OHT.Company's replacement business operates on its distribution network which consists of 300+ distributors, 4500 dealers & 51,000+ sub-dealers which covers about 600 districts across India.The company also operates 400+ Exclusive CEAT outlets, 12 tyre service hubs & sells to 400+ multi-brand outlets across India.The company has the Highest brand connect with “grip” and “safety”. Company serves 27+ OEMS such as Honda, Hero, bajaj, Suzuki, Yamaha, Royal Enfield, mahindra, Piaggio, Tata, Maruti, Hyundai, Datsun, Forse etc.

Global Presence:

JK Tyre has global market presence across 100+ countries. It has a strong network of 6,000+ Dealers & Distributors, 850+ Brand Shops, 45+ Mobility Customers, 1,400 Fleet Operators, 82 Retread Centres and 140+ Sales, Service & Stocking Points in India. In overseas company has 138 Dealers and 67 Distributors in Mexico, 72 Distributors in North and Latin America, 37 Distributors in Africa and 63 distributors in Middle east and South east Asia.

CEAT has global presence in 110+ countries with business operations across continentswith 9 geographical clusters and 7 regional offices located in Brazil, Dubai, Germany, India, Indonesia, Nepal and Philippines ensuring comprehensive worldwide coverage.It is the market leader in the country of Srilanka with 50%+ market share where it runs operations through a JV of 50:50. The company has also developed a product range to cater to US markets and recently entered the US for passenger and Commercial segment.

Financial Comparisons:

Latest Results:

JK Tyre has reported Revenue of 3643 Cr. in Q2Fy25 and 7298 Cr. in H1Fy25 marking 7% and 45% dip in revenue on YoY basis respectively. It has reported 144 Cr. and 356 Cr of PAT in Q2Fy25 and H1Fy25 and marked fall of 42% and 13% on YoY basis. Its EBITDA also dropped by 26% and 10% as on Q2Fy25 and H1Fy25 on YoY basis.

CEAT has reported Revenue of 3,299.9 Cr. in Q3Fy25 and 9797 Cr. in H1Fy25 marking 11.4% and 9.4%growth in revenue on YoY basis respectively. It has reported 133.2Cr. and 509.1 Cr of PAT in Q2Fy25 and H1Fy25 and marked fall of 43.5% and 28.2% on YoY basis. Its EBITDA also dropped by 18.6% and 13.3% as on Q2Fy25 and H1Fy25 on YoY basis.

Industry Outlook:

The Indian tyre industry is experiencing significant growth, projected to more than double its revenue in the next decade, reaching $22 billion by FY32, primarily driven by the expanding automotive sector, rising disposable income, and government initiatives promoting electric vehicle usage; with a CAGR of around 5% expected in the coming years. The Indian tyre market is expected to reach around 253.9 million units by 2032.

CONCLUSION:

Considering the growth of India’s automobile industry and even individual companies, it can be observed that both JK tyre and CEAT has posted negative PAT in recent quarters but JK tyres have reported good sales compared to CEAT and even the CMP of JK tyre is at much more reasonable price so one can think of investing in JK tyre over CEAT at the first choice. While overall fundamentally both are strong brands and both have good market positions so diversifying investments into both companies can also be a good option for long term investment.

Which one you will prefer for investing point of view? And of course, for your vehicle? let us know on info@smartinvestment.in and you can also request for comparisons between any companies or sectors, in return we will try to cover it in our next report!

Comparative Analysis by: HET ZAVERI

info@smartinvestment.in

(Disclosures: Above mentioned is not an investment advice, it’s just a comparison of two likewise companies of same sector which may help in taking advised decisions for investors. At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients, or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.

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