I have pleasure in welcoming you all to your Company’s 68th Annual General Meeting.
The Board of Directors and I, would like to thank each one of you for being present in this virtual meeting and for your continued support and interest in your Company.
To say, that the last year was challenging would be an understatement.
India and the world at large faced an unprecedented health crisis that
claimed innumerable lives and brought economic activities to a standstill.
My condolences go out to all the families, particularly those connected with
extended JK Family, including our employees, channel partners and
suppliers, who lost their loved ones to the Covid-19 virus. I also express my
heartfelt gratitude to frontline workers across various fields like healthcare
and law enforcement, who risked their lives to ensure that public at large
remained healthy and protected.
In March 2020, we encountered the first wave of the novel Corona virus,
which forced an industrial shutdown on a global scale. Your Company
prioritized people and their well-being; we provided ambulances, masks,
sanitizers and other safety materials to sanitation workers at local
municipalities in addition to modifying workplace engagement. Besides, JK
Tyre along with JK group companies, pledged Rs. 100 million to the PM
Cares Fund to support its fight against COVID-19.
Towards the last few months of 2020 things had largely normalised, when
the second wave hit with more devastating results. Once again, your
Company came forward to help the community at large Including donating
oxygen concentrators and oxygen Plants. The Pushpawati Singhania
Hospital & Research Institute, co-promoted by JK Tyre, a multi-speciality
Hospital, was converted into a dedicated Covid care facility. For our
employees, we launched Mission Critical, an initiative to achieve 100%
vaccination of employees and their families. We initiated location-specific
round-the-clock Covid task teams to provide relevant information on tests,
medicines and hospital beds availability to our employees. Your Company
started the ‘JK CARES’ programme to support the families of employees,
who most unfortunately succumbed to the pandemic, on three fronts -
financial, educational and health insurance.
The FY21 can be depicted as one of ‘contrasting halves' where we
witnessed a slowdown in economic activity in the first half followed by an
impressive rebound in the second one. The pandemic-induced national
lockdown in the first quarter of FY 2020-21 brought a complete halt to
economic activities across sectors, including automobiles. This resulted in
a sharp decline in consumer demand. The economy and our industry
gradually recovered following the re-opening of consumer markets and a
relaxation in COVID-19 norms. By the third quarter, OEM, as well as
replacement segment, posted double-digit demand growth, which got
extended into the fourth quarter.
Following the phased lifting of lockdowns, the Indian economy recorded
healthy growth across most sectors. This was reflected in growing
consumption of key commodities e.g. cement, steel, chemicals etc.,
energy demand, E-way bills and GST collections that moved towards and
beyond pre-pandemic levels. India's GDP did well to contract by only 7.3%
in FY2020-21 following a 24.4% contraction in the first quarter of the year
Digitalization played an important role in the country’s economic revival. At
JK Tyre, we embraced digitalization to make the most of the ten operating
months of FY 2020-21. We extensively leveraged this tool
to not only ensure safety of our own employees, but also to remain in
constant touch with a wide network of our channel partners to ensure the
well-being of their personnel and businesses.
Our AI based Digital ‘claims system’ is addressing customer service way
faster than earlier - reducing claim resolution time from 3 days to 30
minutes. We are transforming internal systems and processes through
digital enablement, bringing in operational efficiencies and cost
rationalization. More so, it made our Company Future Ready and helped
us in to achieving yet another goal of carbon footprint.
The result was that FY 2020-21 proved to be one of the best performing
years in your Company’s history from a holistic perspective.
EBIDTA for the year at Rs. 1,349 crores at consolidated level, was 33%
higher than the previous year, and likewise Profit Before Tax at Rs. 497
crores increased multi-fold. The Board has recommended a dividend of
100%, i.e., Rs. 2 per equity share for the year.
Furthermore, the Company achieved a net debt reduction by nearly
Rs. 1000 Cr. in FY 21. This not only helped in lowering its financial cost
but also upgraded Company’s credit rating. All the financial ratios
improved considerably during the year, and resulted in improving net debt
to EBIDTA significantly.
To meet market needs we introduced premium products across categories.
During this period our indomitable pioneering spirt, led to roll out of the 20
millionth truck Radial Tyre, a First in the country, and the nationwide
launch of the SMART TYRE range. These tech-enabled tyres have
embedded technology, monitoring tyre pressure and temperature, helping
them communicate with the driver, leading to higher safety. These
environmental friendly tyres are also in synergy with our green ethos.
Despite frequent disruptions, the Company could effectively enlarge its
distribution network covering almost the entire Indian landmass. It
successfully increased its market presence across various categories of
tyres. The focus on premiumisation of products contributed in no small
measure, to improve JK Tyre’s market presence.
JK Tornel’s plant in Mexico resumed operations from July 2020 and posted
growth in operations during FY 2020-21. The thrust on technologically
advanced products specially developed for the targeted markets resulted in
profitable growth and an expanded international footprint in more than 110
countries, in face of intense competition from low cost brands. Demand
and preference for brand JK Tyre, for both truck and passenger radials
categories, across geographies, including exacting markets like Europe
and North America, was indeed rewarding. It is a matter of satisfaction that
JK Tyre is now the largest commercial tyre exporter to the US.
High Capacity utilization and efficiency improvement at Cavendish
Industries Limited transformed its operations, which contributed
significantly to the overall performance of the Company. With consistent
growth in revenue ,CIL achieved a turnover of Rs.2571 Crores, 16% higher
and clocked an EBIDTA of Rs.398 Crores - 54% Higher than previous year.
With the aim to enhance brand premiumisation, we launched extensive
digital-driven marketing campaigns. Our ‘Zindagi ke Pahiye’ and ‘Shukriya
India’ campaigns proved to be resounding successes on the social media,
each garnering some of the highest viewerships in the industry. The
primary focus of these two campaigns are the truck drivers and the fleet
community at large, who keep the economy on the move. At JK Tyre, we
The future-ready products we have launched for the domestic and global
markets, were designed and developed in our global R&D & Tech facility in
Mysuru, which comprises of some of the most advanced testing and
evaluation facilities in this part of the world, manned by a team of talented
scientists and engineers who deploy modern tools such as AI and
Analytics. Our R&D spends are continuously increasing year on year.
The Company relentlessly pursues sustainability measures. We pioneered
the launch of ‘green’ tyres, becoming the first Indian tyre company with a
verified carbon footprint. Our carbon emissions have been consistently
declining. The use of renewables in our power mix increased to 55% during
FY21. We are continuously moderating water consumption across each of
our manufacturing units; our Kankroli plant is a global benchmark for the
lowest water consumed per kg of tyre manufactured. We are the first Asian
tyre company to receive ISO 50001 certification for Energy Management.
We follow the concepts of “Circular Economy” i.e, the 4 R strategy
Reduce, Reuse, Recycle and Renew. We are continuously working
towards conservation of natural resources with the highest priority,
reducing our dependence on water, fossil fuels and promoting
environmental welfare, thus, becoming the 1st Green & Clean tyre company
JK Tyre is well poised with its 'green' tyre and 'greener' company thrust, to
qualify for the growing trend of customer preferences towards ESG friendly
businesses. We have successfully capitalized on this opportunity by
supplying tyres to the fast growing E Vehicle segment.
Employees are our greatest asset. We have in place some of the best
industry practices to facilitate their growth and success, which resulted in
your Company being recognized as a Great Place to Work.
We are fully conscious of our obligation towards the society, and as a
responsible corporate, discharge the same with dedication and pride.
Towards this end, we supported our ongoing programmes of improving
health and sanitation, skill development, environment etc. while combatting
the Covid-19 pandemic.
With the decline in the number of Covid cases and a greater vaccinated
population, we can look forward to a better economic activity. The
Government's focus on infrastructure building, should catalyse the auto
and consequentially tyre industry growth.
The trust that you, our dear shareholders, and other stakeholders have
placed in us, has been a constant source of encouragement more so in
these challenging times. I am deeply grateful to our Customers, Partners,
Stakeholders, Suppliers, Banks and Community at large, for their
I am thankful to Team JK Tyre for their hard work and dedication,
especially during these tough times. Their contribution has taken the
Company to great heights.
I would like to take this opportunity, to humbly urge you all, to come forward
and collaborate, to combat this pandemic together. Propagate vaccination
and its benefits among the people around you, while continuing to follow
the COVID protocol of distancing and masking.Once again, I wish you all and your family’s good health and prosperity. STAY SAFE !
Thank you all and Jai Hind!
Note : These excerpts do not purport to be a report of the proceedings of
the 68th Annual General Meeting of the Company held on 27th August,