Equity research firm, Dynamic Levels is bullish on J K Tyres and has suggested a buy rating on the shares. In fact, JK Tyre & Industries Ltd is one of top 500 shares, identified by Dynamic Research based on technical and fundamental research. Here are 8 reasons the equity research firm is suggesting to buy the stock.
A preferred OEM supplier
JK Tyre is a preferred supplier to prominent automotive Original Equipment Manufacturers like Tata Motors, Maruti Suzuki, Honda, Ashok Leyland, Mahindra & Mahindra, Volvo Eicher, General Motors, Volkswagen, Fiat, Nissan, BEML, TAFE and Caterpillar India, among others.
JK Tyre’s acquisition of Tornel
JK Tyre's acquisition of Tornel opened gates to several new international markets.
Has the largest tyre capacity in India
The company maintains a leadership position in truck/bus radials segment: JK Tyre possesses one of India's largest tyre capacities (1.87 million truck/bus radials per annum).
Positive industry outloook
The Indian tyre industry's outlook is positive as growth in domestic tyre volume is expected to increase by around 8-10% during 2016-17 on the back of a pickup in auto demand, improving economy and stable raw material prices.
It is a value-accretive company that has enhanced market capitalization seven-fold in just three years.
JK tyre is the first tyre company in the world to be certified for QS 9000 for multi location operations across the entire product range.
JK tyre will continue to capitalize on this growing segment to maintain leadership, enhance margins, deepen market presence and ensure that products reach new customers.
At CMP of Rs.146 the stock trades at a P/E of 6.80 on 2nd September, the market cap of the company is Rs 3034.76 crore. As per Dynamic Levels we recommend a buy on JK tyre at CMP with a price target of Rs.175 and stop of Rs 130.
Disclaimer: The contents of the article is sourced from the research report of Dynamic Levels with due permission. The report is authored by A Ammar Ali Mirza. Dynamic Levels is a website owned by Dynamic Equities Pvt Limited, a member of BSE and NSE. You can visit Dynamic Levels. The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and Dynamic Levels do not accept culpability for losses and/or damages arising based on information in this article.