JK Tyre to spend Rs 200 crore to enhance production
JK Tyre on Monday said it plans to spend Rs 200 crore in the next two years to enhance its production capacity through de-bottlenecking of its plants even as it continues de-leveraging exercise and reduced net debt by Rs 929 crore in FY21.
The company is focusing on prudent capital allocation and tight management of its working capital to ensure accelerated de-leveraging going forward, JK Tyre said in a statement.
"Going forward, the company is planning to incur Rs 200 crore over the next two years by way of de-bottlenecking its plants to increase capacities, to be funded through internal accruals," it said.
There would be sufficient operational capacities through the proposed de-bottlenecking to cater to higher demand for its products, the company added.
The company has 12 manufacturing facilities with annual production capacity of 5,75,000 metric tonnes (around 32 million tyres) in FY21.
In FY21, the company said it has reduced substantially the net debt by Rs 929 crore through higher cash accruals and funds released due to better working capital management, which is a reduction of 17 per cent compared to last year.
According to an investor presentation, the company's net debt in FY21 stood at Rs 4,483 crore, down from Rs 5,412 crore in FY20. It also achieved interest cost reduction by Rs 83 crore in FY21.
Stating that the finance cost is lower by 15 per cent approximately, JK Tyre said it is on track to reduce its long-term debt to a level of 45 per cent approximately by FY24.