MUMBAI, 24 JANUARY, 2023 (GPN): Shares of JK Tyre & Industries (JK Tyre) fell sharply today, extending their losing run for the fourth straight session. The stock plunged 4.66 per cent to settle at Rs 160.50 over its previous close of Rs 168.35. The scrip has slumped 11.77 per cent in four days. JK Tyre has fallen 24.82 per cent from its 52-week high of Rs 213.50, hit on December 9 last year.
JK Tyre & Industries has a high ratio of current liabilities to total assets of 46%. The company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it’s not necessarily a bad thing, it can be beneficial if this ratio is lower.
Against this backdrop, shares of Apollo Tyres Ltd surged to a new 52-week high this month. Recall that shares of Ceat Ltd and JK Tyre & Industries Ltd scaled new 52-week highs in December.
Analysts said the counter looked under pressure and technical charts hinted at a fall below Rs 150 in the near term.
Angel One Analyst, said, JK Tyre has tumbled over 20 per cent in the last couple of trading weeks and is heading toward the 200-SMA (Simple Moving Average) on the daily chart. Historically, the 200-SMA has proved to be a strong demand zone and looking at the momentum in the recent fall, one may expect the stock to test the same, which is placed around the Rs 148-150-odd zone. On the technical front, the counter is nearing the oversold region and could halt near the mentioned zone. However, any breach below the same could even disrupt the technical chart structure.”
On the flip side, the Rs 170-180 odd zone is to be seen as an immediate hurdle, and an authoritative breach beyond the same could only trigger fresh longs in the counter, Krishan added.
AR Ramachandran from Tips2trades said, “JK Tyre stock price looks under tremendous pressure with strong resistance at Rs 173 on the daily charts. A daily close below Rs 157 could lead to a sharp fall till Rs 148-142.5 in the coming days.”
Around 2.77 lakh shares changed hands today, which was more than four times compared to JK Tyre’s two-week average volume of 66,000 shares. Turnover on the counter stood at Rs 4.49 crore, commanding a market capitalisation (m-cap) of Rs 3,952.01 crore.
The counter’s 14-day relative strength index (RSI) came at 47.88. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 28.24.
The stock traded higher than 200-day moving averages but lower than 5-day, 20-, 50- and 100-day moving averages.
Further, JK Tyre has an average target price of Rs 177.67, Trendlyne data showed, suggesting a potential downside of 10.70 per cent. The stock has a one-year beta of 1.05, indicating average volatility.
During Q2FY23 Dr. Raghupati Singhania, Chairman and MD (CMD), JK Tyre & Industries had said, “JK Tyre has delivered another quarter of highest ever revenues at Rs 3,764 crore, up by 26% on YoY basis. Our strong presence in the OEM and strength of our innovative, high performance, diversified product portfolio and high brand imagery. Operating margins have somewhat improved due to better market conditions.”
As of December 2022, promotors held a 56.26 per cent stake in the company.
Meanwhile, Indian equity benchmarks ended on a flat note, tracking weakness in financials. The 30-share BSE Sensex pack settled 37 points or 0.06 per cent higher at 60,979; while the broader NSE Nifty index finished almost unchanged at 18,118.
JK Tyre, the flagship company of the JK group, is headed by Dr R P Singhania as its chairman and managing director. It is a one of the leading tyre manufacturers in India and amongst the top 25 manufacturers in the world with a wide range of products catering to diverse business segments including, truck/bus, light commercial vehicles (LCV), passenger cars, multi-utility vehicles (MUV) and tractors.
JK Tyre & Industries (NSE:JKTYRE) is doing it’s best to Multiply Its Share Price, lined up in next week is the unveiling of its two new Xtreme terrain, high performance tyres in it’s Ranger Series – Ranger HPe & Ranger X-AT.The company is all set to enhance the SUV Experience with new product offerings and innovation in the pipeline. Ends
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