JK Tyre & Industries Ltd
NSE:JKTYRE
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Ladies and gentlemen, good day, and welcome to the JK Tyre & Industries Q4 FY '24 Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mitul Shah from DAM Capital Advisors Limited. Thank you, and over to you.
Thanks, Mike. Good afternoon all. Thanks the management for providing us this opportunity. On behalf of DAM Capital, I would like to welcome you all to the Q4 and year ended FY '24 earnings conference call of JK Tyre. Today, we have with us from the management team, Mr. Anshuman Singhania, Managing Director; Mr. Arun K. Bajoria, Director and President, International Operations; Mr. Anuj Kathuria, President, India Operations; Mr. Sanjeev Aggarwal, Chief Financial Officer; and Mr. A K. Kinra, Financial Adviser.
I shall now hand over the call to the management for their opening remarks, post which will open the floor for Q&A session. Over to you, sir.
Very good afternoon to everyone, and I welcome you to all to join JK Tyre Q4 FY '24 and FY '24 Earnings Call. I'm Anshuman Singhania, Managing Director. With me are my colleagues. I have with me Mr. Arun Bajoria ji, President and Director, International; Mr. Anuj Kathuria ji, President, India; Mr. A K. Kinra, Financial Adviser; and Mr. Sanjeev Aggarwal, CFO of the company.
I take this opportunity to record that the financial year 2024 was a year of many milestones and achievements. Highest-ever revenues with record volumes and best ever profitability. We achieved new milestones of rolling out the 30 million Truck/Bus radial tyres and become the only Indian tyre company. We rolled out the 10 million STEEL KING tyres, one of our premium SKUs in our portfolio, which has strengthened our leadership position in the LCV radial category. Our mobility solution business, selling Mile, a high-growth segment has crossed INR 100 crores mark in FY '24. Our journey of launching innovative and high-performance product continues across all segments, including tyres for EV.
Talking about the FY '24 performance, revenue crossed INR 15,000 crores mark with 3x growth in the net profit enabled by operating leverages, better product mix and favorable input costs. Operating margin improved by more than 500 basis points to 14.1% over FY '23, resulting in EBITDA of the year at INR 2,122 crores, the ever highest.
Our balance sheet has further strengthened by deleveraging measures and equity rates rise by the way of QIP, which received an overwhelming response from marquee investors, reinforcing confidence in our growth story. We remain committed to continuously deleverage the balance sheet. The net debt at the end of the year stood at INR 3,704 crores, lower by 18% as compared to March 2023. There has been a significant improvement in the generation of free cash flows and return ratio touching is high teens during FY '24.
Coming to Q4 FY '24 performance. Overall, the revenue was recorded at INR 3,714 crores. EBITDA margins were recorded at 13.4%, registered a growth of 26% on a year-on-year basis, reaping the benefits of product prevision and efficiency improvements.
Pursuant to the regulations of the government with respect to the notification on Extended Producer Responsibility, EPR for the car industry, we have made a provision of INR 106 crores pertaining to FY '23 and FY '24 in Q4. In FY '25, we have started recovering the EPR cost from the customers.
Automotive sales in India continue to witness buoyancy in fiscal year 2024. Passenger Vehicle segment recorded a high single-digit growth with a yearly volume crossing 4 million mark, supported by strong growth in SUV sales and growing sales of alternate fuel power trains.
Commercial vehicle sales started with a positive trend in FY '24, fueled by government's infrastructure initiatives, expansion in core industries and sustained growth in e-commerce and abiding through high-frequency indicators, such as GST collections, e-way bill and positive PMI. Though the demand momentum has moderated in the second half due to elections in the country, but the same is likely to pick up pace after the new government takes charge and infrastructure project implementation work reviews.
On the full year basis, JK Tyre has clocked domestic volume growth of 6%, contributed by replacement and OEM segment, which grew by 7% and 5%, respectively, over the last year. However, export volumes are flat despite geopolitical disturbance and supply chain disturbance on account of the Red Sea prices.
In the fourth quarter, we witnessed a volume growth of 7% in the replacement segment. However, the OEM volumes were muted, mainly owing to lower CV offtake. The export grew at a healthy rate of 43%. On the tyre sector outlook, we remain optimistic in the medium to long term with passenger and 2-, 3-wheeler tyres to remain buoyant through the year. The replacement demand for CV tyres is stable. However, demand from the OEM is expected to pick up pace in the second half of the fiscal. All export demand has started recovering since the last quarter of FY '24 and is likely to sustain going forward.
On the channel development during the year, we have further strengthen our market presence in the replacement segment by adding 130-plus brand shops, 200-plus lead customers and large accounts were added in the mobility business. The ongoing capacity expansion projects for the TBR and PCR are nearly completion and in full production will be achieved by Q1 FY '25. Further earlier announced capacity expansion program in TBR, PCR and all steel truck radial tyres are an aggregated cost of INR 1,400 crores are under implementation and progressing well according to plan.
We continue to deliver a strong performance across all ESG pillars. We are committed to become an environmentally responsible organization, focus on sustainable energy. Our usage of biomass as an alternative fuel has reached to a level of 38%, which is reaping up benefits and underscoring our commitment.
Today, we have achieved renewal energy consumption of 40%. We are among the top 3 manufacturers globally for the lowest energy and raw water consumption. This clear goal, we are progressing towards our mission of reducing carbon intensity to 50% by 2030.
With the [indiscernible] side, I would like to share that our Chairman and Managing Director, Dr. Raghupati Singhania ji was featured as a major icon at the National Geographic Channel. Honoring his journey of dedication, determination and strong leadership who have nurtured JK Tyre to new heights.
Now I would request Bajoria ji to talk about the performance of Tornel Mexico.
Thank you very much MD Sir. In financial year '24, JK Tornel Mexico, financial performance remained stable during the year despite increased competition from Chinese tyres and currency appreciation impacting exports. The economic situation in Mexico is buoyant owing to increased FDI and tapering inflation. JK Tornel achieved revenues of about MXN 5,500 million equivalent to INR 2,628 crores. Operating profit at EBITDA level remains similar at MXN 447 million, equivalent to INR 212 crores.
For the quarter, JK Tornel Mexico registered sales of MXN 1,251 million, equivalent to INR 612 crores, lower by about 9% on a year-on-year basis. Profitability at EBITDA level stood at MXN 96 million, equivalent to INR 47 crores, up by 10% on a year-on-year basis due to better product mix, further supported by input costs.
JK Tornel is continuously expanding the sales channel through new dealers appointment and enhancing sales network in U.S.A. It is also pursuing launch of new sizes in radial tyre segment to bolster presence in U.S. markets. With these measures, we expect to scale higher revenues and better profitability in the financial year '25.
Now I request Mr. Sanjeev Aggarwal to brief about the financial performance of the quarter.
Thank you very much, sir. So as far as the key highlights for FY '24 and Q4, quarter 4 financials are concerned, I will tell you. With consolidated revenues for FY '24 were recorded at INR 15,046 crores, which was up by 2.5% as compared to INR 14,681 crores in FY '23. Consolidated revenues for quarter 4 were recorded at INR 3,714 crores as compared to INR 3,645 crores in Q4 FY '23, which is up by 2%, marginally up by 2%.
Profitability at EBITDA level was recorded at INR 2,122 crores as against INR 1,334 crores in FY '23, registering a growth of 59% on a Y-o-Y basis. And for the quarter, the EBITDA was recorded at INR 497 crores as against INR 389 crores in the corresponding period, which is a growth of about 28%. EBITDA margins improved significantly by 500 basis points to 14.1% in financial year '24 as compared to 9.1% last year. EBITDA margins during the quarter were recorded at 13.4% as against 10.7% in the corresponding quarter.
On full year basis, cash profits almost doubled to INR 1,675 crores as compared to INR 879 crores in FY '23. During the quarter, we have made provision for INR 74 crores in JK Tyre and INR 32 crores in CIL towards the EPL liability, which was regulated, which was notified by the Government of India, and this liability was provided in Q4.
For FY '24, the profit after tax increased to INR 811 crores, which is 3x of the profits which we registered last year at INR 265 crores.
Consolidated capacity utilization was about 89% in Q4, which was 86% for the full year. Consolidated exports stood at INR 663 crores, up by 39%. Subsidiary companies, Cavendish Industries Limited and JK Tornel Mexico continued to perform well and have significantly contributed to the revenue and profitability on consolidated basis.
Cavendish Industries Limited posted a top line of INR 3,665 crores with EBITDA of INR 513 crores, registering an operating margin of 14%, and the profit after tax stood at INR 156 crores in FY '24 as against INR 9 crores in the corresponding period.
Revenue for the quarter stood at INR 873 crores. EBITDA stood at INR 108 crores as compared to INR 112 crores in Q4 of FY '23. And profit after tax stood at INR 19 crores for Q4 FY '24.
Earnings per share on consolidated basis improved to INR 29.84 per share in FY '24 as against INR 10.64 per share in FY '23. Return ratios have improved significantly. ROC and ROE are in the high teens level.
Net debt stood at INR 3,704 crore as on 31st of March '24, which is 18% lower as compared to the previous year. And the leverage ratios improved significantly again and net debt to equity improved to [ 0.8:1 ] in FY '24 as against 1.29 in FY '23. And net debt to EBITDA improved to 1.75 as against 3.39 as of the end of March '23. The Board has recommended a dividend of 225%, including an interim dividend of 100% -- in addition to an interim dividend of INR 1 already paid, 50% paid.
Further, I'm happy to share that our Managing Director, Mr. Anshuman Singhania was named as one of the top 10 innovative CEOs in 2024 by business success story. The balance sheet of the company is much healthier now with improved financial ratios, and we have already circulated our earnings presentation, which is available on our website as well as on stock exchange website.
And now we are open to the forum -- open the forum for the question and answers. Thank you.
[Operator Instructions] We have the first question from the line of Bharat Bhagnani from Living Root Analytics.
So my first question is with regard to...
This is the operator here. Request you to kindly go off the handset. Please come closer to the microphone and go over speakerphone.
Yes. Can you hear me?
Yes, this is loud and clear.
Yes. So my first question is with regard to the tax rate in FY '24, '25. So Sanjeev, to what tax rate are we going to target this year, current financial year?
So this will be 25%. We will be moving into the new tax regime in JK Tyre from 1st of April '24.
Including Cavendish, right?
In Cavendish, the new regime is already applicable. Obviously, we had adopted earlier. So we will be -- in both the companies will be under 25% tax regime.
Okay. Okay. And you had mentioned the net debt movement, net debt amount, but can you tell me the gross debt movement and how much was repaid during the year? And how much is scheduled for repayment in the current financial year?
Yes, I will definitely. So the gross debt was about INR 4,800 crores last year. And we have paid almost about INR 360 crores this year, and this has come down to INR 4,450 crores.
And current year also similar amount will be repayable?
Yes. INR 350 crores plus amount is repayable in this financial year '25.
Okay. Anshuman ji, I just had a question regarding the sales growth in the current year that we managed to just do around 2% to 3% worth of sales growth. This is including some amount of pricing growth as well. So I mean, have you lost out on volumes in terms of volume growth?
No. On a year-on-year basis, on a consol basis, we have a growth of 3% and volume growth was 4%. So we have definitely not lost on the volume growth. In fact, we have really inched up on all the categories in terms of our volume growth.
Okay. So pricing, maybe pricing has remained the same. So this year, I mean what kind of growth are we targeting this year in terms of sales, now that we have additional capacities also?
So we are targeting 8% to 10%.
This is including volume and pricing, both?
Yes, this is -- 8% to 10%, which will include the volume and price. And the industry is sort of expected to grow at about 6%.
Okay. Okay. Okay. And sir, in the light of recent key raw materials like rubber, and even crude being volatile, but rubber actually having increased to what it is right now at about INR 182 per kg odd. So do you see that impacting margins for this year and next year, in an environment where we may not be able to increase the prices of the products?
No. You see that the average raw material basket has remained flat on a Q-on-Q basis. And we are expecting the basket to rise about 3% to 4% in Q1. So we are looking at -- we are not looking at a margin impact.
Which means you will pass on the price...
Yes. We are looking at taking a price increase in the range of 1.5% to 2% across categories in Q1. And rest, we are looking at bettering our premiumization, the mix and operating efficiency.
Sir, have we taken any price hike yet?
Yes. We have taken all the -- around the range of about 1.5% to 2%.
Okay. Okay. Okay. In which category, sir? In which -- the tyre category or is this across?
Across the category.
We have the next question from the line of Mumuksh Mandlesha from Anand Rathi.
Congratulations...
Your audio is not very clear. If you could go off the speaker phone and come close to the microphone.
Is it better now?
Yes. Kindly speak a little bit closer to the mic.
Congratulations on the good results and on the Chairman video and the MD awards, sir. In terms of distribution, sir, how do you see the expansion of the current 750-plus bank stores and the reach of 1,300 fleet operators expansion ahead, as that is driving the outperformance over the industry for the company? Also, what would be the volumes coming from the brand store currently? And in terms of profitability, how it would we be differing from the normal channel?
Yes. Anuj ji, would you like to...
Yes. So regarding the brand shops, especially the steel wheels and the truck wheels, we expanded the brand shops by almost 150 brand shops are added. And now they are close to 800-plus brand shops we have. So this is in ECR segment, almost 50% of our sales are now coming through the brand shops. And it also helps us to get better connect with the customers. We are offering the entire solutions on this. Thus, what we -- we intend to add roughly around 200-plus brand shops in the FY '25. And we expect that this will further help us to better our connect and also these brand shops being exclusive to us are definitely going to improve our brand salience and brand image. So we are working towards this. So that was the one question. What was the other question that you had?
In terms of fleet operators, sir, how is that changing next year?
Fleet operators. Yes. So our engagement with the fleet operators is improving year-on-year. In fact, this year also, we have added some of the marquee fleets to our account. Not only about fleet, but also we are talking about the mobility solutions where we sell miles where again, we are adding some very good large accounts. So if you take the whole country, larger than 100 truck fleets would be around 1,800 plus fleets, and we are connected with almost 1,300 out of the 1,800 fleets. So we expect that further consolidation of fleets is likely to happen. And therefore, that is a definite advantage for us as a company.
Okay. And how would be the profitability of the brand store, sir? Would it be different from the normal channel or it's a similar margin profile of product sales we get from the brand shops?
Brand shops are definitely better on profitability because they are able to make a value sales pitch to the customers. And they are also providing services, which is also a revenue stream for them. So overall, I think so the brand shops who are doing a consistent volume depending on the size of the store anywhere between 200 to -- as high as 2,000 tyres also. So those brand shops are definitely more profitable.
Got it, sir. Just a question to Sanjeev sir. In Q4, sir, what was the price hike taken? Any marginal price increases taken in Q4 quarter, sir?
So as Anshuman ji just mentioned, there were some price hikes which was taken in Q4, but that is very marginal increase. But laser price increase was taken again in Q1 of FY '25. So there was not much of a price increase. But yes, marginal price increase across segments [indiscernible] on selected SKU spaces.
Sir, continuing on this part, considering the further cost inflation, how much further price hike we will require to take to pass on the impact also the EPR impact? And any thought by when that price hike would come, sir?
You are asking for the year as a whole or for the quarter 1?
So I mean there would be -- in Q1, there would be some inflation impact on the gross margin. And maybe there was further addition in Q2 also. So on total, how much for the price hike we required to pass on the impact?
So very broadly, Anuj ji, definitely will be in a position to tell you better. But very broadly, we will be passing on any increase in the raw material price impact to the customers. But we are seeing that there is not much of a price increase likely on raw material in the entire financial year.
There, I would say that as I said that on a quarter-on-quarter basis, right now, there was a flat increase in raw material, but quarter, we are expecting that in the quarter 1 of FY '25, 3% to 4% increase. So there, we have already increased our price to 1.5% to 2% on the finished goods across the category for quarter 1. And we will be governed by the competitive prices as it plays out for the rest of the quarter. The other thing which you, I think, asked was the EPR. So we have already started charging per tyre basis on the invoice to the customer. So this will be a recovery or charge to the customers, which we're going to recover.
So that would cover the -- all the impact for EPS for next year, right, sir?
Yes.
Yes, it will. And this was just calibrated depending on what is the cost of the certificates that we will be purchasing. So this will be a pass-through cost.
Got it. And sir, is this phenomena across the industry, we are seeing? Or this is something JK has initiated in terms of pass-through the cost?
Under EPR?
Yes.
So the 2 companies we have done, but it is applicable for across the industry.
Got it, sir. Yes. And just lastly, on Europe, sir, sorry, I mean Mexico, can you share what kind of a revenue outlook for next year, sir?
No, as I said that we have taken some measures and we hope to better our revenue and also, therefore, our bottom line, the profitability.
We have the next question from the line of Jaimin Desai from Emkay Global.
Congratulations on maintaining profitability and the expansion and return ratios. My first question is around demand outlook. You mentioned 8% to 10% growth in top line expectation for this year. Can you provide some color in terms of splitting it up in terms of volumes and pricing? Earlier, I believe you [indiscernible] for double-digit growth in the India replacement segment. Does that expectation still hold?
So what is -- we -- your voice is little -- could you just repeat your question, please, clearly.
Earlier you indicated double-digit growth expectation in the domestic...
Jaimin, your audio is slightly muffled. If you could go off the speaker phone and come closure to the microphone.
Yes, is this better?
Yes.
Okay. Yes. Sir, my question was regarding the domestic replacement demand. Earlier, we have indicated double-digit expectation from this category? Does that expectation continue to hold? Do we still expect double-digit volume growth in this segment for this year?
It will be varying from segment to segment. In PCR, definitely in the replacement market, we expect a double digit. The CV may be being a high single-digit growth. But overall, I think so it would be somewhere between that 8% to 10%.
Understood. And also just to check whether I've got the understanding, right? So you mentioned that there were very marginal price hikes in the fourth quarter upon which you've taken a 1.5% to 2% increase already in the first quarter. And there will be some hikes going forward as well, and that would entirely cover the higher EPR liability as well as the -- whatever RM cost increase has been there. Is this understanding correct, sir?
No, no. Actually, what you are mixing...
I'll clarify. See, when we said quarter 4, we have taken some price increases. They were on select SKUs, that is one. In quarter 1, we have done 2 things. One is that we have taken a price increase of 1.5% to 2% on account of raw material. Then we have also started recovering the cost of the PRC which is based on the per kg, like ETR cost, it is on a per kg or per tyre basis. So that is whatever is the cost it's being recovered.
And this will continue. The ETR will continue as a cost recovery measure.
The other point is that further raw material price increases that are expected during the year, the efforts would be to pass it on. But as Anshuman ji also clarified initially that we will be continuing to hasten the work on premiumization, product premiumization and our operating efficiencies as a combination of the 3, price increase, product premiumization and operating efficiencies. All 3 put together, we would definitely try to offset the entire material cost.
Understood. That is very clear. Just one final question. In this quarter, we have seen a decline in the EBIT margin for Cavendish on a quarter-on-quarter basis. Is this entirely because of the EPR provisioning? Or is there some other reason also?
You are talking about the operating margin reduction?
Yes, for Cavendish on quarter-on-quarter basis.
[Operator Instructions]
Who had asked the question on the Cavendish?
Sir, Jaimin had asked the question.
Yes. So just to respond -- is he there on the line, Jaimin?
Yes, sir. he is there.
Okay. See, one is that, yes, there was a EPR charge that came in, in quarter 4, which was not there in quarter 3 or any of the other quarters. There was a slight reduction also in the top line. That was mainly on account of certain OEM in the CV space, where the demand has suddenly tapered off during March. But overall, I think so we have been -- if I take the EPR charge-off, it is more or less comparative. And if you look at the -- further with the corresponding quarter, you will see that there is a 90 basis points improvement.
[Operator Instructions] We have the next question from the line of Krupashankar from Avendus Spark.
So I have two questions. Just wanted to get a sense of what would be your total capacity in India across TBR, PCR 2-wheeler, specifically in India?
So the total capacity, as we have also shown in our presentation -- investor presentation at [ 3.4 ]. And this is for all the companies, including Tornel in Mexico and the [ compensation ] of JK Tyre. But the details are given, kindly refer to that number. This is not readily available with me at the moment. Refer to that number in the presentation.
Okay. But India capacity would be how much out of this 3.4?
This is, again, a segment wise given there. And different for different kind of tyres for truck and bus and passenger...
I understand. I'll refer to that. The second piece of it, just wanted to also get a sense of how would -- is there any internal estimate on what would be the market share across segments in India, across perhaps truck and bus PCR and 2-wheeler?
This is really difficult to calculate because the data from all the companies are not easily available. So we have not been calculating the market share, but we can tell you that we are the market leader as far as these data -- for our own assessment on the PCR.
On overall commercial vehicle tyres and also specifically on TBR in the domestic market, we are the #1.
Okay. And this is across OE and replacement is what you're saying?
Total domestic.
Okay. Any range on what would be that number, 25%, 30%? I'm just curious, just wanted to understand because internally, there are a lot of numbers floating around to that side and that's the reason why I...
We are the market leader as reported to...
Okay. All right, sir. On the outlook part of it, just wanted to quiz whether -- on the CV side, are you seeing the traction on replacement picking up primarily on the sentiment? Or is it more of a pricing-driven push to boost volume, sir?
Yes. So in the CV market, we are seeing stability in the replacement market. But however, in the OEM, we are seeing some flattish trend. But we are expecting that this will also pick up by the second half of this fiscal year.
We have the next question from the line of Nirav Seksaria from Living Root Analytics.
Sir, you said the capacity utilization for FY '24 was at 86%, and we are going to grow at 8% to 10%, which takes us to a utilization of around 90%. So why are we setting up additional capacities rather we can use the amount to repay our debt, gross debt and reduce it?
When we talk about capacity utilization, the number that we have given is an annual number. But if you go into quarter by quarter or month by month depending on the seasonality. Also, the OEM demand is not the same throughout the year. So there are months where we utilize the capacities even at a higher level. So this is not something that we can say that you can just rather than going for the expansion, you go for this. There is a certain headroom also that is always better to have. So overall, I think so, if any company, any organization is having a capacity utilization in excess of 90% is actually a very good number to have.
Sir, could you give me the breakup of capacity like utilization across TBR and PCR?
Yes. The other thing is that if I take this number that we quoted is the entire capacity utilization, but the radial capacity utilization is definitely better as compared to. Because buyers, as we know, the demand is muted, although in some segments which are still there, in the truck tyres still around 45% of the truck tyres are in the replacement market. The demand is there for the past. But if I take the TBR utilization, it is definitely in the 90s, and PCR is actually in excess of 95%.
And also, I would like to add, it takes about 2 years to add to capacity. Lead time is high. This is a time taking process...
We expect that the market will grow at a CAGR of 5% to 6%.
Yes. And if we can capture more, then why not.
And sir, what's the outlook on the CV cycle?
What did you say EV or CV?
CV cycle.
Passenger vehicles.
Commercial vehicles cycle, sir.
Last year, we had a good growth. This year, again, we expect that it will be in the high single digits industry level for the CV vehicle...
This you're talking about commercial vehicle cycle, right?
Passenger vehicles.
I'm talking about commercial vehicle.
So commercial vehicle, the vehicle side, what we are getting the imports is going to be rather flat, but overall flat, but it will be better in H2 and muted in H1.
And that will be easily from OEM side?
Yes, yes. Replacement, we already clarified. Replacement demand is holding up.
Okay. And sir, just one last question. Could you tell us the expected -- the raw material basket prices, which is synthetic rubber, carbon black, which the company paid in Q4?
No. As I said that our overall basket quarter-on-quarter was flat, we are expecting the raw material basket to increase by 3% to 4% for quarter 1.
Okay. So sir, in Q1, we are seeing -- expecting a 3% increase, which will be via which input?
Mostly natural rubber, followed by some small quantities of other competence.
And sir, at what level of crude are we really comfortable at?
Up to 85 -- 80 to 85 range.
While there is a correlation between crude and certain derivatives, but there is no direct correlation as such, and it happens at a lag. So it's very difficult to kind of base your decisions on that.
[Operator Instructions] We have the next question from the line of Chirag Jain from Emkay Global.
Sir, would you like to spend some time on the new marketing campaign that we have started, Desh Ka Tyre. And obviously, in terms of how differently we are positioning our products, the overall, let's say, the reviews that you would have received so far in terms of improving the brand perception. Obviously, this is not in isolation. We are also expanding capacity on PCR and also want to expand or increase the share of SUV tyres. And overall, obviously, this sort of implication in terms of the growth profile and also in terms of margin profile. So maybe some more, let's say, insights on this marketing campaign per se?
Thank you, Chirag. You see that last year, we have been able to come out -- last to last year combined, we've been able to come out with very innovative product lines, which is a smart tyre and puncture guard, which we had in ATL presence and BTL presence all throughout in India. That was a very strong communication plus on the digital front as well. But here, this ad, which we are very proud of, and you must have also seen. And it has become like a sort of a theme, national anthem type of a theme song for viewers and our followers. This also indicates our whole range right from a 2-, 3-wheeler tyre to a farm tyre to LCV tyres to passenger tyres right up to truck and bus tyres and even off-the-road tyres. So it is a very -- it is a holistic range ad. And as the ad depicts, it connects India to India and from the North, South, West, all corridors. And this ad has been live now on air in all the major channels and plus a lot of song with dance in terms of its publicity in the radio as well. So I welcome all of you to please have a look at this ad.
The other part of your question was how are we increasing our sort of margin expansion, how it is helping us. Well, in the passenger car radial, we are -- as we've been always saying that we have been increasing our premiumness and we have been moving on the lower rim sizes to higher -- more higher rim sizes. So above 15-inch, 16-inch and 17-inch sizes, there our premiumness is coming in, and this is definitely adding profitability to our books.
Similarly, also even in the truck radial, our innovative products like XF, XM and XD has also added our premiumization mix in that story. So that is also catching a lot of acceptability in the market, and we like to take this story forward.
So over the medium term, would it be fair to assume that our market share gain story or the outperformance vis-a-vis industry should continue? And even on the profitability side, irrespective of short-term commodity swings, but on a medium-term basis, there would be upward bias to our profitability, given the entire focus on premiumization?
Yes. So this premiumization story would definitely have an insulation effect, if I can say, from the rise of the raw material because this will sort of offset that if I got that question right.
We have the next question from the line of Nirav Seksaria from Living Root Analytics.
Sir, just a follow-up, what are we doing to increase the brand visibility like CEAT has partnered up with IPL. Recently, MRF has also taken Virat Kohli for an advertisement. So sir, why don't we do something similar to increase our brand visibility by taking up any celebrity or a known personality?
It's a very interesting question. And -- but our core has been a motor sports and we have spent decades in our motor sports. And so we are doing a lot of activity around motor sports. Our cars which have -- formula cars, which have also recently run on Dal Lake in Srinagar was a very big event. We have also done recently in Bangalore, also a formula event. We are shortly going to be doing some more interesting events in Mumbai as well. We have also done in Arunachal Pradesh some of the rally. Plus we have actively also participated in 2 big events where women driving was also there. So we are very actively engaged into this.
I think in the last year, the brand visibility significantly better than we have get on.
So -- but the time assessment on activities...
Having said motor sport is still the main thing. But beyond that, our social media, we have leveraged the social media presence and just latest what we call as the JK anthem has also given a lot of positive feeling, the emotional connect with many of our large customers on Hindustan Jab Mile Hindustan Se. This campaign is also being very, very -- very well appreciated amongst our dealer, channel partners, among the customers.
[indiscernible].
So I feel that we are doing the right things on the brand side.
Sir, but I totally [indiscernible] that, but motor sports is quite [indiscernible] of the category. And if we get on to celebrities and famous known personality that will sky rocket our brand in advertisement and normally public will also be able to associate with a brand in a much better manner, which will increase the brand awareness...
Thank you for -- you see that every company has its own philosophy of endorsements. In the past, and we continue to do that, we have endorsed a lot of research in our brand communication. Even in our earlier act, we have included our racers. And not only male, but we have also promoted a lot of known lady -- women rallies in that. So the endorsement is completely with a decision of the company as a policy.
We have the next question from the line of Arvind Kedia from MDK & Associates.
Am I audible?
Arvind, your audio is a little muffled. If you could go off the speaker phone.
Am I audible now?
Yes, this is much better.
Sir, you mentioned about motor sport and obviously, JK Tyre has been one of the very few companies that have been promoting motor sport in India. But recently, there have been rumors that MotoGP might not come back to India. And like F1 is also we don't know it hasn't come to India for the past -- more than 10 years. So with the declining interest in motor sport, what are your views on that? And like how are you going to increase the audience's demand in that field? And foreign...
You see that F1 is not the only motor sports which is the front runner. But all over the world, including in India, there are several other formats. Track race is one format where we are actively participating, but rally off-site, hilly terrains, otherwise off-site rallies and -- apart from circuit racing, there is a lot of following amongst the motor enthusiast and as well as people who are watching the sports. So there is a lot of fan following for this. And we are very proud that we are leading the path in attracting the following. And we have several formats in which we are participating in our motor sports.
And the women rally is another part, which is also very much at our core, and we nurture the talent there. And we are very proud to be associated with this call.
We are leading in women.
I would now like to hand it over to the management for closing comments. That was the last question.
Okay. That was the last question. Okay. Thank you so much for joining us today. We hope that we have clarified all your doubts. And thank you very much, once again. Thank you.
On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.