One of the major tyre manufacturing companies of India, JK Tyre, has declared the acquisition of 26% of the equity share capital of automotive parts corporation Treel Mobility Solutions for approximately Rs 6 crore. On Thursday, JK Tyre stated that “The acquisition will help in synergising the sensors business with tyre business as a value-added product offering to customers.” Treel is the producer of sensors controlling different parameters of performance like air pressure, speed, temperature etc. in working conditions of a vehicle.
The company stated, “The sensors are suited for the truck as well as non-truck applications, and this will provide synergy with the Mobility Solutions Business. This, in turn, will help in product improvement and also new product development.” To prevent further delay in the acquisition of Treel and to gain time, JK Credit & Finance (JKCF), a JK Tyre group organisation, gained 50% equity commissions from the promoters of Treel in the month of June-July 2019. Now, JK Tyre & industries will obtain 26% equity shares of Treel from JKCF. In addition to that, JK Tyre stock increased by 0.8% on the BSE to close at Rs 71.35 on Thursday.
Moreover, JK Tyre on Thursday announced a 76.7 percent drop in its consolidated gain after tax (PAT) at Rs 15.68 crore for the first quarter ended June 30, 2019. The tyre maker expects the economy to increase from the latter half of the current year when the volumes are supposed to pick-up ending into development in profitability. Chairman and Managing Director of the brand, Raghupati Singhania stated that profitability throughout the quarter had been affected due to overall slow-down in the automotive sector.