JK Tyre & Indust (JKTYRE)

FairStock Score: 76/100 — STEADY

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Five-year revenue CAGR of 10.05% with 30.50% profit growth shows a growing, operating-leverage-driven business.
• Latest quarter sales of ₹4,223 Cr and net profit of ₹208 Cr, supported by positive free cash flow of ₹253 Cr.
• Piotroski F-Score of 8/9 suggests strong financial health and improving fundamentals.
• Promoter holding of 51.72% aligns management interest with minority shareholders.

Concerns

• Debt/equity of 0.92 is high for a cyclically exposed tyre business.
• EV/EBITDA of 186.95 is extremely elevated and warrants serious scrutiny.
• Price of ₹418.45 is above the Graham Number of ₹319.35, leaving no margin of safety on a conservative valuation.
• Dividend yield of only 0.60% and Altman Z-Score of 2.45 in the grey zone add risk.

AI Analysis

Whenever I look at a tyre company, I remind myself it is a cyclical business tied to roads, freight and replacement demand. JK Tyre's numbers confirm a decent operator, but not a wonderful business at a wonderful price. Revenue has compounded at 10.05% over five years; latest quarter sales were ₹4,223 Cr, with net profit of ₹208 Cr and profit growth of 30.50%. That is genuine operating leverage. Return on equity of 14.37% and ROCE of 12.78% are respectable, and a Piotroski score of 8/9 indicates the balance sheet is improving. Free cash flow of ₹253 Cr gives some reassurance, and promoters own 51.72%, so my interests are aligned. But I am a patient buyer, not a cheerleader. The balance sheet carries debt/equity of 0.92, which is heavy for a cyclical; an Altman Z-Score of 2.45 puts it in a grey zone, not the safety I prefer. The dividend yield is just 0.60%, so I am not being paid to wait. Most importantly, value: at ₹418.45, the stock trades far above Graham's conservative number of ₹319.35, leaving no margin of safety on a Graham basis. The DCF fair value of ₹469.17 suggests a little upside, but the EV/EBITDA of 186.95 is a red flag I would need to understand before trusting any DCF. In true Buffett style, I would rather lose an opportunity than lose capital. I would call this a cyclical with decent quality, not a franchise with an enduring moat. I would wait for a lower price, or for debt to come down and cash flow to stay strong.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer