JK Tyre & Industries Limited (JKTYRE) Q3 FY23 Earnings Concall Transcript

JK Tyre & Industries Limited (NSE: JKTYRE) Q3 FY23 Earnings Concall dated Feb. 06, 2023

Corporate Participants:

Anshuman Singhania — Managing Director

Arun Kumar Bajoria — Director and President, International

Sanjeev Aggarwal — Chief Financial Officer

Anuj Kathuria — President

Analysts:

Basudeb Banerjee — Analyst

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Ashutosh Tiwari — Equirus Securities. — Analyst

Mitul Shah — Reliance Securities — Analyst

Tushar — Private Investor — Analyst

Yash Agarwal — IIFL Securities — Analyst

Raj — Navodaya Enterprise Private Limited — Analyst

Amyn Pirani — J.P Morgan — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the JK Tyre & Industries Limited Q3 FY ’23 Earnings Conference Call, hosted by ICICI Securities Limited. [Operator Instructions]

I now hand the conference over to Mr. Basudeb Banerjee, Vice President at ICICI Securities Limited. Thank you, and over to you, sir.

Basudeb Banerjee — Analyst

Thanks, Inba. Thanks to JK Tyre’s management for giving us the opportunity to host the Q3 FY ’23 Post-Result Call. We have with us the senior management of JK Tyre’s, represented by Mr. Anshuman Singhania, Managing Director; Mr. Arun Bajoria, Director and President, International Business; Mr. Anuj Kathuria. President, India business; Mr. Sanjeev Aggarwal, Chief Financial Officer; and Mr. A. K. Kinra, Financial Advisor.

So over to the management of JK Tyre’s for initial comments. Post that we will take the Q&A. Over to you.

Anshuman Singhania — Managing Director

Thank you. A very good morning. Am I audible?

Operator

Yes, you are, sir.

Anshuman Singhania — Managing Director

Yes. A very good morning once again, and a very warm welcome to JK Tyre Q3 FY ’23 Earnings Call. And I thank you all for joining us today.

I’m Anshuman Singhania, the Managing Director. I have with me Mr. Arun K Bajoria, Director, President International; Mr. Arun Kathuria — Anuj Kathuria, sorry, President, India; and Mr. A. K. Kinra, Financial Advisor; and Mr. Sanjeev Aggarwal, CFO of the company. On behalf of the JK Tyre family, I wish you all a very happy and prosperous New Year 2023.

We are happy to share that JK Tyre is celebrating 25 years of its acquisition of Vikrant, our plant at Mysore. JK Tyre took over the Vikrant plant in 1997 and turned it around into the state-of-the-art facility, backed up by the world-class Dr. Raghupati Singhania Center of Excellence for research and development. The capability, capacity, and the revenues from this plant have grown multifold since the acquisition, leading into a very successful investment. Recently, JK Tyre hosted the 18th Edition of the Indian Car of the Year, ICOTY, and the Indian Motorcycle of the Year, IMOTY Award 2023, the most coveted and prestigious award in the Indian automotive industry, a platform created by JK Tyre. This represents our zeal towards honoring innovation and technology in the Indian automotive industry.

Quarter three witnessed a strong performance across all key parameters: significant revenue growth, higher volume and improved operating margins. We continue to maintain our profitability growth in quarter three with a strong performance across segments through our focused actions, both on the products and the market front, which led us to achieve double-digit revenue growth of 17%.

Our profit margins improved, supported by softening in the raw material prices and continued focus on the cost control and timely price revisions. Overall volume increased on account of higher OEM offtake. Replacement demand continued to be buoyant. Export continued to remain resilient and recorded a revenue of INR484 crores in the third quarter, despite global headwinds.

Automotive industry continued to witness buoyant demand in the CV segment during the quarter. The growth in the commercial vehicle sales was majorly led by MHCV. CV growth is expected to trend further up in the near to medium term, supported by large allocations of fund for the infra capex in the recently announced union budget. Passenger vehicle sales were also higher with the change in preference towards UVs and rising thrust on personal mobility. Currently, the order book and volume with major passenger vehicle manufacturers remain healthy.

On the overall tire sector outlook, we believe that the domestic automotive sector has significant potential of growth, driven by aggressive stance of the government to improve infrastructure spends, higher fleet utilization and implementation of scrappage policy. The rising demand of personal vehicles will be driven by higher disposable income of the middle class. Further, increased agriculture output should foster rural demand. These tailwinds, coupled with tapering inflation shall continue to boost the tire sector demand.

On the export front, we expect the momentum to gain strength in the coming quarters, considering our widespread performance in the export market, product positioning and our enhanced capability, especially in the PCR tires. The government has laid down a concrete measure around EV vehicle transition and green energy to propel the adoption of green mobility.

We believe that the EV segment will further gain momentum with the government’s visionary action towards creating awareness and creation of EV infrastructure in the country. To strengthen our product portfolio, we have recently launched low RRC tires in the PCR and the TBR range, and also introduced Smart Tire range for the EV/SUV segment. We have full range of EV tires to cater to various market segments. We are further strengthening our relationships with OEMs by jointly developing tires for their specific requirements.

Operating margins improved sequentially by about 150 basis points on account of softening of raw material prices and continued focus on the cost reduction. We expect margins to improve in the coming quarters, with further softening likely in the raw material prices. We are committed to bring best-in-class product to cater to diverse market segments, operational excellence and continue to deliver improved performance.

I’m happy to inform that the International Finance Corporation, a member of the World Bank Group, the largest global development institution, has approved the proposal to invest in the company INR240 crores in the compulsory convertible debentures, CCD, on preferential issue basis, carrying a coupon of 6% per annum, which will be converted into equity shares on the face value of INR2 per share at the conversion price of rupees INR180.5 per share. The Board of Directors in its meeting held on February 3, 2023, approved the above investments by IFC.

Now, I will request Mr. Arun Bajoria ji to talk about the performance of JK Tornel Mexico.

Arun Kumar Bajoria — Director and President, International

Thank you. Thank you, MD sir.

JK Tornel Mexico continued to perform well in terms of overall revenue and profitability. During the quarter, JK Tornel achieved a turnover of INR608 crores as compared to INR521 crores in Q3 of financial year ’23, registering a healthy growth of 17%. Operating profits EBITDA stood at INR48 crores vis-a-vis INR46 crores in the corresponding quarter, a slight improvement.

Quarter three is generally a muted quarter on account of lower number of working days due to the Christmas holidays in December. During the quarter, exports demand was impacted in North American and Latin American markets due to macroeconomic headwinds. However, we believe that the global demand situation will improve amidst easing in inflationary pressures in the coming quarters.

JK Tornel continues to remain the largest tire supplier to all the mass merchandisers in Mexico; that is Walmart, Soriana, Chedraui, Elektra, Coppel, CASA Ley, Suburbia and Comercial Mexico. Tournel also continues to command highest PCR market share in the PCR replacement market with a share of over 12%, and this is the highest market share in Mexico. We are happy to share that JK Tornel received Best Supplier Award by both Walmart and Soriana, largest mass merchandising stores in Mexico. The award has been given out of 300-plus suppliers in home and essentials category.

JK Tornel has also achieved the status of being highest seller of tires on online platform with a market share of 50%. JK Tornel has secured the prestigious four-star rating for British Council Sword of Honor Award. Since the acquisition of JK Tornel, there has been a significant growth in business operations and has resulted in yielding multi-fold value creation for its parent company that is JK Tyre India. Thus, it has been a successful strategic investment for JK Tyre.

Now, I would request Mr. Agarwal, company’s CFO, to brief about the financial performance of this quarter.

Sanjeev Aggarwal — Chief Financial Officer

Thank you, sir. Good morning, everyone.

Let me brief you about the financial performance in Q3 FY ’23. The consolidated sales were recorded at INR3,623 crores vis-a-vis INR3,084 crore in Q3 FY ’22, registering an increase of 17% on Y-o-Y basis. The average capacity utilization was 88%, with radial capacity at even higher utilization levels during the quarter. In first nine months of FY ’23, sales were recorded at INR11,037 crores, an increase of 27% on Y-o-Y basis, majorly contributed by higher volumes. Export revenues from India were recorded at INR484 crores in Q3 FY ’23.

Profitability at EBITDA level in the quarter was recorded at INR349 crores as against INR281 crores in the previous — in the corresponding quarter, an increase of 24%. Operating profit margins were recorded at 9.6%, an increase by about 150 basis points over the previous quarter. Cash profit for the quarter stood at INR228 crores and profit before tax stood at INR113 crores.

The balance sheet of the company is healthy, and leverage ratios remain within the acceptable levels. We remain committed to deleverage our balance sheet further through reduction in long-term borrowings going forward. The already announced capacity expansion in PCR and TBR tire projects are under implementation and are progressing well. We have already circulated our earnings presentation, which is also available on our website, as well as on the stock exchange websites.

Now, we open the forum for question-and-answers. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question comes from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Hi, sir. Congrats on good set of numbers. Quickly wanted to check how does the revenue growth breakup between volume growth and pricing growth in third quarter?

Anshuman Singhania — Managing Director

Yeah. The volume growth was at 4%, and the price increase was at 14%. So overall, at a consolidated level, overall growth was at 18% for the quarter.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Okay. And India replacement market was stable it seems, while revenues grew about 7%, 8% and that could be largely pricing-led, right?

Anshuman Singhania — Managing Director

No, the replacement market, our volume growth is to the tune of 8%.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

In India?

Anshuman Singhania — Managing Director

Yes.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Okay. Okay. Okay. Because I was looking at the mix and it suggested about 8% kind of revenue growth and therefore, you would have seen a healthy pricing growth as well. So there is some disconnect. Okay.

And second question pertains to the RM cost related benefit which we saw in this quarter. Would it be between 3 percentage points to 4 percentage points in terms of RM cost benefit, or it was lower than that?

Anshuman Singhania — Managing Director

Well, the RM cost benefit has definitely — the quarter has seen a softening of the RM for the quarter, but the major impact is to be seen by the end of the quarter. The full impact of the reduction will be seen in the coming quarters.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Okay. Okay. Got it. And lastly, if you can talk about the price hike taken in the third quarter in the replacement market and any price hike taken in fourth quarter so far?

Anshuman Singhania — Managing Director

We have definitely taken the price increase. As I have mentioned to you, the price increase was in the tune of 11% in the quarter three. And we have taken the price — I’m sorry, the price increase was in the tune of 1% to 2%, which we have taken in the quarter three.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Okay. And any price hikes in Jan so far, or not yet?

Anshuman Singhania — Managing Director

No, Jan, we are not taking any price increase.

Jinesh Gandhi — Motilal Oswal Financial Services — Analyst

Got it. Thanks. I’ll come back in queue.

Operator

Thank you. Our next question is from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead.

Ashutosh Tiwari — Equirus Securities. — Analyst

So, hi, sir. What is the debt number currently — net debt number?

Anshuman Singhania — Managing Director

Sorry?

Sanjeev Aggarwal — Chief Financial Officer

The debt number is for net — on a net basis, this is INR4,900 crores on a consolidated basis.

Ashutosh Tiwari — Equirus Securities. — Analyst

It was around INR5,000 crores last quarter. So there is some reduction over there, right?

Sanjeev Aggarwal — Chief Financial Officer

Yes.

Ashutosh Tiwari — Equirus Securities. — Analyst

And secondly, if I look at India operations, other expenses have gone up on a quarter-on-quarter basis as a percentage of sales. So any particular reason behind that?

Sanjeev Aggarwal — Chief Financial Officer

So the other expenses have gone up because of the various factors, including the energy prices which has gone up and also the higher utilization level across units. So, that is the reason for increase in the other expenses.

Ashutosh Tiwari — Equirus Securities. — Analyst

And exports side, you mentioned INR484 crores revenue for the quarter. What was the number during the second quarter? Because if I look at the presentation, it says around 16% of India sales are exports and that number will come to around INR400 crores, while you mentioned INR484 crores. There is some disconnect in the presentation in this. Or am I missing something over there?

Sanjeev Aggarwal — Chief Financial Officer

So this amount of — the total amount of exports in Q2 was about INR500 crores in sales [Phonetic], which is more or less the same. It’s a kind of a flattish quarter as far as the exports are concerned.

Ashutosh Tiwari — Equirus Securities. — Analyst

But in the presentation, you have mentioned 16% of India’s sales as exports and that number is only coming to INR400 crores. So where the disconnect is with this number and the PBT number?

Sanjeev Aggarwal — Chief Financial Officer

No, that we will check, but 16% is on the basis of the second quarter sales, right?

Ashutosh Tiwari — Equirus Securities. — Analyst

Sorry? On the basis of?

Sanjeev Aggarwal — Chief Financial Officer

No, he is saying that 16% is coming, if I have correctly understood. Second quarter number was 16%, right? Are you talking [Speech Overlap]

Ashutosh Tiwari — Equirus Securities. — Analyst

In both the quarters. In both the quarters, the PBT, it says 16% of sales is exports.

Sanjeev Aggarwal — Chief Financial Officer

Right. So the total amount of the sales has also gone up, the percentage for the exports will remain the same because last quarter total export was INR514 crores to be specific. And this quarter, this export was INR484 crores. So based on the increased number, this is coming out to be the same.

Ashutosh Tiwari — Equirus Securities. — Analyst

Maybe I’ll take it offline. There is some disconnect.

Lastly, on the demand side, how do you see, especially in the truck segment, the replacement demand in this quarter, how is it going?

Anshuman Singhania — Managing Director

Well, in the demand side, the overall tire industry looks good. We believe that domestic automotive sector has a significant potential of growth, driven by aggressive stance, as I mentioned in my speech, by the government to improve on the infrastructure spend, higher fleet utilization and the implementation of scrap policy. So there is a definite rising in demand for even in the personal vehicle space will be driving for higher — as higher disposable incomes of the middle class. Further, agriculture output will also foster well for the rural demand. And these tailwinds, coupled with tapering inflation should also continue to boost the tire demand. So, this is our commentary on the demand. And for the truck-CV segment, I think with the freight movement and the core industry picking up, we see quite a good movement coming ahead.

Ashutosh Tiwari — Equirus Securities. — Analyst

Okay. Thank you.

Sanjeev Aggarwal — Chief Financial Officer

Just to clarify again that point of exports, if you are referring to this presentation, Page number 16, I think the first portion, the pie is showing 16% revenue from exports for India operations and the second one is on a consolidated basis. This includes foreign exports

Ashutosh Tiwari — Equirus Securities. — Analyst

Yeah, yeah. But 16% is what number? I mean, is it India standalone reported revenue?

Sanjeev Aggarwal — Chief Financial Officer

I will try to understand what is your point, but we’ll take it up separately.

Operator

Thank you. We’ll take our next question from the line of Mitul Shah from Reliance Securities. Please go ahead.

Mitul Shah — Reliance Securities — Analyst

Thank you for taking my questions. Sir, I have question on export side. Based on the export number given in the presentation, it seems that export from the Tornel declined sizably Q-on-Q. So can you give some detail here?

Anshuman Singhania — Managing Director

That I’ll request Bajoria ji to please take this.

Arun Kumar Bajoria — Director and President, International

That is mainly because, December, there are Christmas holidays which start from something like 20th, 21st of December and then the plant reopens only on 4th and 5th of January. So, it is only because of the lesser number of working days.

Mitul Shah — Reliance Securities — Analyst

Can you say, sir, how much would be of total, Tornel contribution is export roughly?

Arun Kumar Bajoria — Director and President, International

Out of — you mean the consolidated sales?

Mitul Shah — Reliance Securities — Analyst

Tornel’s export contribution in overall Tornel’s financials.

Arun Kumar Bajoria — Director and President, International

It is about 40% — nearly 40% of the total exports of JK Tyre on a consolidated basis.

Mitul Shah — Reliance Securities — Analyst

Right. And second thing on Mexico operations, if you can give more details, the way we explained about Cavendish, if you can highlight those details for Mexico also and your outlook on the same?

Arun Kumar Bajoria — Director and President, International

Well, see, JK Tornel Mexico has achieved a turnover of INR608 crores in Q3 of financial year ’23 vis-a-vis INR521 crores in Q3 of financial year ’22, 17% growth on year-on-year basis. And EBITDA for the quarter stood at INR48 crores as against INR46 crores, corresponding. And operating margin, it is about 8% in Q3 of financial year ’23 as against 8.8% in Q3 of financial year ’22. So, this is the brief performance of JK Tornel Mexico for this quarter.

Mitul Shah — Reliance Securities — Analyst

Sir, lastly on Mexico side, how much would have been price hike during the quarter last one year and anything we have done in Jan, Feb?

Arun Kumar Bajoria — Director and President, International

Well, last quarter has been very, very nominal, maybe about 1.5% or 2% at the most, but more price increases were taken in Q1, Q2 and Q3. Actually, I’m saying this because in Mexico, the calendar year is what we consider as a whole year, January to December 2022, although for consolidation purpose, we are taking 1st April ’22 to 31st March ’23.

Mitul Shah — Reliance Securities — Analyst

Anything, sir, in Jan, Feb?

Arun Kumar Bajoria — Director and President, International

I beg your pardon?

Mitul Shah — Reliance Securities — Analyst

Any price hike in January, February?

Arun Kumar Bajoria — Director and President, International

No, that we will have to see because at this point of time there is a slight reduction in the raw material input prices and therefore, we are still watching the situation how stable this decrease is going to continue to, and only then we will take a view.

Mitul Shah — Reliance Securities — Analyst

Okay. Thank you, sir.

Arun Kumar Bajoria — Director and President, International

Thank you.

Operator

Thank you. Our next question is from the line of Tushar [Phonetic], an Individual Investor. Please go ahead.

Tushar — Private Investor — Analyst

Thank you for the opportunity, sir. My first question is on the fundraise side that you have announced of INR240 crores. My question is when we have enough cash flow, like an average of INR150 crores [Phonetic] per quarter, so what is the purpose of this fundraise?

Anshuman Singhania — Managing Director

I’ll give this question to Sanjeev ji, please.

Sanjeev Aggarwal — Chief Financial Officer

Thank you. So, well, this is for the purpose of funding our capex plan, which is undergoing and also the future capex plan. So the purpose is to fund, and also for general corporate purpose and to strengthening the balance sheet of the company.

Tushar — Private Investor — Analyst

Okay. And my second question is, what will be the future volume growth expected for next two years, three years?

Arun Kumar Bajoria — Director and President, International

Next three years.

Anshuman Singhania — Managing Director

I’ll give this question to Anuj ji, please.

Anuj Kathuria — President

Yeah. So, as we have been seeing that after the recovery from the pandemic, we think that this year we are seeing good growth, and we expect that the overall automotive industry in a upcycle. So, this is expected to grow further. For the immediate next fiscal, which is FY ’24, we expect that the overall automotive industry would grow at a high single-digit, around 8% to 9%, and different segments would also be growing in that similar range. So once the automotive industry has this kind of a growth, the tire industry we have seen, follows the similar trend, or actually has a slightly better growth than the overall automotive industry. So, this is what we expect and this upcycle will definitely last into FY ’25 as well.

Tushar — Private Investor — Analyst

Okay. Okay. Thank you so much, sir. And my last question is on the interest cost side. Why the interest cost went up in this quarter? And will it go up further or you expect it to come down in the coming quarters?

Anshuman Singhania — Managing Director

Sanjeev ji?

Sanjeev Aggarwal — Chief Financial Officer

Yes, sir. So as you would be aware, there has been a significant increase in the interest rate scenario. And, in fact, within India, if you see that there is an increase of almost about 2.25% by the Reserve Bank of India on repo rate, and similar and rather more aggressive increase we have seen in the case of the LIBOR and SOFR rate globally. So that is the reason, and the banks have actually transitioned the entire increase, but we have, of course, been able to negotiate to some extent with banks. And that is the reason why we have seen the increase in interest cost. And this has all happened in the last about eight — seven months, eight months period. So that is why you are seeing an increase. Going forward, I think more or less, we have already done with and no further rate increase, except 25 basis points maybe expected. And therefore, we will try to control this further and no major hike is expected in India [Phonetic].

Tushar — Private Investor — Analyst

Okay. Thank you so much, sir. That’s all from my side.

Operator

Thank you. Our next question is from the line of Yash Agarwal from IIFL Securities. Mr. Yash Agarwal, please go ahead.

Yash Agarwal — IIFL Securities — Analyst

Yes. Sir, firstly, congratulations on a great set of numbers. I just had one question on the replacement segment. On an industry level, while the OEMs — the demand from the OEM is pretty good, replacement is facing some kind of weakness. So, what is the case with JK Tyre?

Anshuman Singhania — Managing Director

No, as you correctly said, the OEM is coming back very strongly. The replacement market is also coming back. They are — because it is now — the demand scenario is in a very strong footage because the core sector industries has started moving and picking up, so has the movement. So the demand story is very clear. So, this is going to be fueling the replacement market much better than before and we are very optimistic that the replacement market will pick up.

Anuj Kathuria — President

Just to add, your question was that OE demand seems to be higher than the replacement. Actually, OE, if you see, is bouncing back from a low base, whereas replacement demand has not dipped during the previous year. So it’s actually on a good base we are seeing but we are still seeing a good growth. But yeah, it doesn’t match the OE because of the — it’s a base effect basically.

Yash Agarwal — IIFL Securities — Analyst

Okay. Thank you, sir. That’s it from my side.

Operator

Thank you. Our next question is from the line of Raj [Phonetic] from Navodaya Enterprises. Please go ahead.

Raj — Navodaya Enterprise Private Limited — Analyst

Hello?

Anshuman Singhania — Managing Director

Yes.

Raj — Navodaya Enterprise Private Limited — Analyst

Thank you for the opportunity, sir. My question is what will be the effect of the duty hike on compounded rubber on the margin?

Anshuman Singhania — Managing Director

Well, the import duty increase has a marginal impact. This is regarding the customs duty on the compounded rubber. We will offset this through various extensive cost reduction measures. And further, our priority is to maximize domestic procurement. So, we see this as very marginal impact.

Raj — Navodaya Enterprise Private Limited — Analyst

Okay, sir. My second question is what is the reason behind the sale and profit drop in Mexico’s operation on quarter-on-quarter basis?

Anshuman Singhania — Managing Director

Bajoria ji?

Arun Kumar Bajoria — Director and President, International

Yes, there is a slight drop, mainly because of the exports that has reduced in the month of December ’22, and that has brought down the quarter exports to a lower level than what it was in October, December ’22 — ’21. But going forward, as I had also mentioned in my opening observations that things are looking up. And you see, this is mainly — there is a reason for it that the freight rates during this time, December ’21 and October-December ’21, and also earlier, July-September ’21, they had shot through the roof.

And suddenly now in the last six months, that is H2 of 2022 — financial year ’23, these freight rates have come down drastically. So with the result that the — all the dealers there have been sitting on much higher cost inventory and that is the reason that we have not been able to clock that kind of higher export sale because, obviously, they are trying to clear those inventories which are higher cost. But going forward, I think the situation will definitely equalize and be continuing to do better.

Raj — Navodaya Enterprise Private Limited — Analyst

Okay, sir. Sir, last question is, as you said that your other expenditure is higher due to higher utilization, so my question is will they be in 13% to 14% of sale or what, in the future?

Sanjeev Aggarwal — Chief Financial Officer

Sorry, what is your question?

Raj — Navodaya Enterprise Private Limited — Analyst

My question is, will they be in 13% to 14% of the sale or what?

Sanjeev Aggarwal — Chief Financial Officer

So the other expenses are in the 13% to 14% range of the net sales. You are right. So, we are in the process of controlling impact and let’s say, with the reduction in the energy prices going forward, probably there could be some reduction further going forward. But the overall percentage of other expenses will remain in the same range or maybe lower.

Raj — Navodaya Enterprise Private Limited — Analyst

Thank you. That’s all from my side, sir. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead.

Ashutosh Tiwari — Equirus Securities. — Analyst

Can you please share the Cavendish numbers for this and last quarter?

Sanjeev Aggarwal — Chief Financial Officer

Your voice is not clear. Can you please repeat?

Ashutosh Tiwari — Equirus Securities. — Analyst

Sure. Cavendish revenue for this quarter and Q2 as well, can you share, please?

Anshuman Singhania — Managing Director

So the Cavendish revenue for the quarter three FY ’23, INR976 crores, and the corresponding quarter was INR720 crores. So the growth of 36% over [Speech Overlap]

Ashutosh Tiwari — Equirus Securities. — Analyst

And what was the number in the second quarter?

Anshuman Singhania — Managing Director

Second quarter INR982 crores.

Ashutosh Tiwari — Equirus Securities. — Analyst

Okay. And what was the EBITDA number over there, EBITDA for the last quarter?

Anuj Kathuria — President

EBITDA for Cavendish quarter three was 9.7%.

Ashutosh Tiwari — Equirus Securities. — Analyst

9.7%?

Anuj Kathuria — President

Yeah.

Ashutosh Tiwari — Equirus Securities. — Analyst

Okay. So there is an improvement. And what was the number for the previous quarter — this second quarter, EBITDA number?

Anuj Kathuria — President

Second quarter was 6.3%.

Ashutosh Tiwari — Equirus Securities. — Analyst

There’s a good improvement over there in Cavendish.

Anuj Kathuria — President

Yeah, we had a good capacity utilization as well, good improvement.

Ashutosh Tiwari — Equirus Securities. — Analyst

And what was the number last quarter? What was the utilization level in the third quarter?

Anuj Kathuria — President

Kindly repeat your question?

Ashutosh Tiwari — Equirus Securities. — Analyst

What was the utilization level you said — utilization level in Cavendish in the last quarter?

Anuj Kathuria — President

Utilization level for quarter three was 92% as compared to the previous quarter at 82%.

Ashutosh Tiwari — Equirus Securities. — Analyst

82% was in third quarter last year?

Anuj Kathuria — President

Quarter two of current year. And quarter three of the previous — this corresponding quarter was 81%. So it was hovering around 81%, 82%, but in quarter three, we have taken it up to 92%.

Ashutosh Tiwari — Equirus Securities. — Analyst

As per numbers you shared, there’s a drop in revenue in this quarter versus second quarter, INR982 crores going to INR976 crores. So was the production higher than sales in this quarter?

Anuj Kathuria — President

So, actually, the sales in quarter two was — yeah, so this is basically coming out of the product mix. We had sales of a different product mix in quarter two. Quarter three, we saw more of the two, three-wheeler segment also picking up from Cavendish, which gives the volumes and capacity utilization, but maybe the top line is not that equivalent to the TBR.

Ashutosh Tiwari — Equirus Securities. — Analyst

Okay. Okay. So mix was better in terms of higher two-wheeler contribution.

And also, lastly on the capex part. How much capex we plan to do in this year and next, and what is the capacity addition from that?

Sanjeev Aggarwal — Chief Financial Officer

As I mentioned, the total amount of capex, which is under implementation as of now is on account of two projects. One is PCR, which is in JK Tyre for INR530 crores. And the other one is in the TBR for INR236 crores in CIL, Cavendish Industries.

Ashutosh Tiwari — Equirus Securities. — Analyst

And what would be the capacity increase from this — from these two capexes?

Sanjeev Aggarwal — Chief Financial Officer

So about 16% to 17% PCR capacity and 10% approximately for TBR capacity.

Ashutosh Tiwari — Equirus Securities. — Analyst

Right. 10% only at Cavendish or overall?

Sanjeev Aggarwal — Chief Financial Officer

Cavendish, for TBR capacity at Cavendish.

Ashutosh Tiwari — Equirus Securities. — Analyst

Okay. Okay. Yeah. Got it. Got it. Okay. Thanks a lot. That’s all from my side.

Operator

Thank you. Our next question is from the line of Amyn Pirani from J.P. Morgan. Please go ahead.

Amyn Pirani — J.P Morgan — Analyst

Yes. Hi. Thanks for the opportunity. My question was actually with respect to the anti-dumping duty on Chinese truck radials. As far as I understand, the duty was up for review because it expired in August or September of last year. So just wanted to get a sense that is there an update from the government regarding the status of the same? And on the ground, does the anti-dumping duty continue to be operational? Hello?

Anshuman Singhania — Managing Director

There is an anti-dumping duty. Further to anti-dumping duty, there is already a protection in terms of the CVD duty, which is protecting the truck radial coming into India from China. And in terms of the anti-dumping duty, we are already taking this up at an appropriate level.

Amyn Pirani — J.P Morgan — Analyst

Okay. Okay. But do we know if the anti-dumping duty continues to be operational while the government is deliberating on the same, or has it been withdrawn for the time being?

Anuj Kathuria — President

For the time being, withdrawn.

Anshuman Singhania — Managing Director

For the time being, it is withdrawn.

Amyn Pirani — J.P Morgan — Analyst

For the time being, it has been withdrawn. Okay. Okay. So are we then seeing an influx of tires from China or an increase in competition from that side? Or you are saying the CVD is still helpful enough?

Anshuman Singhania — Managing Director

No, right now, the countervailing duty is helping and we are not seeing any major influx coming into India from China.

Amyn Pirani — J.P Morgan — Analyst

Okay. Okay. Great. Great. That’s helpful, sir. Thank you.

Operator

Thank you. [Operator Instructions] As there are no further questions from the participants, I would now like to hand the floor back to the management of JK Tyre for closing comments. Over to you, sir.

Sanjeev Aggarwal — Chief Financial Officer

Thank you. Thank you very much for joining us for this call. And I would like to thank you all, and hope we have been able to reply to your questions to your satisfaction.

Operator

[Operator Closing Remarks]