The shares of JK Tyre Industries Ltd surged in Thursday's trade, extending their gains for the third straight session. The stock jumped 5.45 per cent to hit a day high of Rs 158.60 over its previous close of Rs 150.40. Around 3.05 lakh shares changed hands on the BSE, more than double the two week average volume of 1.13 lakh shares. Turnover on the counter was at Rs 4.72 crore and had a market capitalisation m-cap of Rs 3,799. 34 crore.
The shares price of JK Tyre was up after World Bank Group member International Finance Corporation IFC announced that it would invest $30 million about 240 crore to pick a 5.60 per cent stake in the tyremaker.
IFC's investment will help expand manufacturing capacity and integrate advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres, which have better safety and longevity. IFC will hold a 5.60 per cent stake in the tyre major through an issue of CCDs on a preferential basis, JK Tyre stated in a release.
The investment aims to bolster the company's capital structure and increase production of energy-efficient radial tyres by more than 10 per cent -- from 32 million to over 35 million tyres a year by 2025.
According to Raghupati Singhania, Chairman Managing Director of JK Tyre, it will be used for the expansion of projects that are not only growth-oriented but also committed to promoting sustainable development and enhancing societal value creation. Innovation and technology are the core of our products, which keeps us ahead of the curve to meet the needs of our customers. The automotive industry is responsible for almost 49 per cent of India's manufacturing GDP, with tyre manufacturers contributing to 2 per cent. Wendy Werner, India Country Head at IFC said that their partnership with JK Tyre Industries will drive capacity expansion and scaled manufacturing of energy-efficient tyres through resource-efficient tech, low carbon solutions, and circularity. IFC aims to catalyze further investments and market competitiveness by signalling a long-term view of the industry, and in so doing, contribute to India's goals to become both self-reliant in domestic manufacturing and a global manufacturing hub. We are unlocking the potential of India's manufacturing sector to drive job creation and sustainable growth. The stock was last seen trading higher than the 5 day, 20 day and 200 day moving averages but lower than the 50 day and 100 day moving averages on the technical front. The RSI was 52.89, the counter's 14 day relative strength index. A level below 30 is considered overbought, while a value above 70 is considered overbought. The company's stock has a price-to- equity P E ratio of 25.97.
The Trendlyne data shows a potential downside of 3.77 per cent, suggesting that JK Tyre has an average target price of Rs 150.50. The scrip has a one-year beta of 1, indicating average volatility.
Indian equity benchmarks traded almost flat in late-morning deals, as losses in technology and state-owned lenders countered gains in consumer goods and metal stocks.