JK Tyre & Industries Ltd said India Ratings and Research (Ind-Ra) has upgraded its long-term issuer rating to low credit risk category ‘IND A+’ from ‘IND A’. The ratings agency has also revised the outlook on the company to stable from negative, JK Tyre & Industries said in a statement.
As per India Ratings, securities with an ‘A’ rating are considered to have an adequate degree of safety regarding the timely servicing of financial obligations, and such securities carry low credit risk.
The upgrade in ratings reflects JK Tyre’s strong operational and financial performance. The upgrade echoes a significant improvement in the company’s credit metrics on account of improved profitability and better-working capital management, it added.
The company is focused on premiumisation across different segments, expanding its customer base and introducing newer tyre categories, such as smart tyres, puncture guard tyres, luxury car tyres and EV tyres.
Moreover, the replacement market has experienced strong demand, contributing significantly in FY23 to the overall income stream, it added.
”Also, increased focus on margin-accretive new product launches, improved capacity utilisation and targeted export market sales have been major contributors, along with a consistent rise in high-margin product categories like radials and two-wheeler and three-wheeler tyres,” it added.