VIKRANT TYRES: MANAGING TURNAROUND
Article Abstract:
JK Industries (JI) holds 74 percent stake in Vikrant Tyres Ltd (VTL) of Mysore. VTL made a turnaround in 10 months since JI took over its management. It re-paid interest and principal of Rs20 crore to the financial institutions in 1997-98. In 1997-98, VTL posted a growth of 4.7 percent against the industry growth of 3.53 percent. Its exports increased by 14 percent. It made a net profit of Rs17.5 crore (accumulated losses of Rs11.40 crore in 1996-97). Its sales were Rs375.76 crore. Its operating profit increased by 50 percent to Rs33.18 crore. JK Tyres and VTL together hold a market share of 20 percent. VTL plans to invest Rs273 crore on modernisation of its facility. It plans to produce steel radials for trucks and buses. (rk) ------------------------------------------------------------ Financial results of Vikrant Tyres Ltd ------------------------------------------------------------ Particulars March 1998 March 1997 (Rs in crore) ------------------------------------------------------------ Gross sales 375.76 361.19 ------------------------------------------------------------ Gross profit 33.38 23.50 ------------------------------------------------------------ Depreciation 3.99 4.34 ------------------------------------------------------------ Interest 18.97 24.51 ------------------------------------------------------------ Tax 1.67 - ------------------------------------------------------------ Net profit 17.75 -5.35 ------------------------------------------------------------ Equity 25.63 16.63 ------------------------------------------------------------ EPS* (Rs) 8.41 - ------------------------------------------------------------ Book value (Rs) 41.92 20.39 ------------------------------------------------------------ * : Weighted ------------------------------------------------------------
Comment:
JK Industries holds a 74% stake in this firm
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
TYRE INDUSTRY - SKIDDING ALONG
Article Abstract:
The Rs9,500 crore Indian tyre industry is heading towards a shake-out, with many players shutting down operations and others trying to struggle along. The main reason behind this slowdown is the recession in the automobile industry which is its only customer. In 1997-98, production rose by three percent and in the first quarter of 1998-99, the overall growth was six percent. This positive growth was mainly due to growth in motorcycles, scooter and tractor segment. The truck and bus segment recorded negative growth of nine percent. The major tyre manufacturers - Ceat, MRF and Apollo - accounting for one third of the original equipment market (OEM) segment, have cut down their production with lower demand from the auto sector. Currently, the industry has an inventory level of over 1,200,000 tyres compared to the normal level of 500,000 tyres. In the present situation, the only bright spot is exports which went up by nine percent to Rs907 crore in 1997-98 and is expected to go up further by 10 percent and realise Rs1,000 crore. India exports tyres to around 50 countries with the US alone consuming 30 percent of the total exports followed by Asian countries at 29 percent and Middle East Asia with 20 percent. In terms of volume, exports accounted for 22 percent of production. (gsh)
Comment:
India: Tire industry heads towards shake-out, with many players shutting down operations and others trying to struggle along
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
VIKRANT TYRES
Article Abstract:
The loss making Vikrant Tyre Ltd (VTL) of Mysore has been able to achieve a turnaround in performance in the first half of 1998-99 due to financial restructuring. It is currently implementing a financial restructuring programme which involves cost cutting and retiring expensive debts. It has repaid principal and interest of about Rs20 crore to financial institutions (FIs) and has submitted a revised schedule for repayment of outstanding loans and interest. VTL is focusing on the replacement market and dismantling of excess sales outlets and their relocation. It is launching a productivity improvement programme to offset the high cost of labour. The distribution network of JK Tyres and VTL is being synergised to cut costs. (tsm)(vr)
Publication Name: Dalal Street Journal
Subject: Business, international
ISSN:
Year: 1999
User Contributions:
Comment about this article or add new information about this topic: