JK Tire reduces net debt by Rs 930 crore

CHENNAI: Corporate India has cut debt in a bid to be leaner financially during the pandemic. The latest is tire giant JK Tire, which reduced its net debt by Rs 930 crore in FY21 and “is focused on prudent capital allocation and disciplined working capital management to ensure accelerated deleveraging in the future,” the company said. in a report.
The company reduced its net debt through increased accrued liabilities and freed up funds through better working capital management, a reduction of 17% over last year and the financial cost is lower by about 15%.
Net Debt to EBIDTA improved significantly to 3.32x in FY21 from 5.33x earlier and Net Debt to Equity improved to 1.61x in FY21. fiscal year 21 versus 2.23x last year, according to the release.
“The company is on track to reduce its long-term debt to a level of approximately 55% by FY24,” the statement said.
Going forward, the company plans to commit Rs 200 crore over the next 2 years. This will be done through the debottlenecking of its factories to increase capacity and this will be funded by internal accruals.
“There would be sufficient operational capacity from the proposed debottlenecking to meet higher demand for its products,” the statement said. “JK Tire is currently closely monitoring the current demand scenario and will make a decision on further expansions at the appropriate time,” the statement added.

Ann J. Cox