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JK Tyre: Falling returns, governance issues point to the company losing ‘total control’

JK Tyre has been facing a tough time on the back of weak balance sheet and governance issues. The company’s key return ratios are heading south, cash in the books reflects a liquidity crunch and interest coverage ratio is looking bleaker than ever. Also, a high managerial remuneration against peers is raising eyebrows.
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7 Sep 2020 8 Mins Read 0 comment
An employee inspects a tyre at the JK Tyre factory in Mysuru. Getty Images
An employee inspects a tyre at the JK Tyre factory in Mysuru.
The pandemic has impacted several businesses, which have already been witnessing surprising slowdowns and friction post FY19, severely over the past few months. However, it is the auto and related industries that have suffered the most during FY20 owing to several daunting factors such as falling demand, industry reforms, and liquidity crunch due to the NBFC crisis. The
casts doubt on the reliability of the financial statements. JK Tyre has been facing multiple challenges on several fronts. The company needs to put its act together and take control to tide over the crisis. ( The author is a Sebi-registered independent research analyst. He can be reached here.) ( Graphics by Sadhana Saxena)
The pandemic has impacted several businesses, which have already been witnessing surprising slowdowns and friction post FY19, severely over the past few months. However, it is the auto and related industries that have suffered the most during FY20 owing to several daunting factors such as falling demand, industry reforms, and liquidity crunch due to the NBFC crisis. The casts doubt on the reliability of the financial statements. JK Tyre has been facing multiple challenges on several fronts. The company needs to put its act together and take control to tide over the crisis. ( The author is a Sebi-registered independent research analyst. He can be reached here.) ( Graphics by Sadhana Saxena)

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