Ladies and gentlemen, good day, and welcome to the Balkrishna Industries Limited Q3 and 9 months FY 2026 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Poddar, Joint Managing Director. Thank you, and over to you, sir.
Thank you, Steve. Good morning, everyone, and thank you for joining us today. I would firstly like to wish all of you a very happy new year. Along with me, I have Mr. Bajaj, Senior President and Director, Commercial and our CFO; Mr. Satish Sharma, Senior President and Director, Strategy and Business Development; Mr. Ravi Joshi, our Deputy CFO; Mr. Sushil Mishra, Head of Accounts, and SGA, our IR advisors. Let me begin with performance updates. The geopolitical and macroeconomic environment continues to remain challenged, and the situation with U.S. tariffs remain unchanged. Despite these headwinds, we delivered a strong sequential improvement during the quarter. Our overall sales volume increased by around 15% quarter-on-quarter.
In the U.S. market, despite the ongoing tariff situation, our strong product quality, brand positioning, and by sharing the tariff impact with our channel partners, this has enabled us to regain some of the sales momentum. India continues to outperform all markets. The positive momentum witnessed in Q2 post the GST reduction has sustained into Q3 as well. This has been supported by broad-based demand across channels and product segments in India. For Europe, it is important to note that the EUDR norms, which were to get implemented from first January 2026, the same has now been deferred by one year and is now likely to be implemented from first January 2027. I would like to take this opportunity to thank and congratulate the Government of India for their remarkable efforts on signing the landmark FTA with EU.
We believe this will allow for further seamless trade between the two geographies. Let me now share some other key highlights. Aligned with our core value of giving back to the society, we have dedicated a state-of-the-art sports injury and rehab center at KEM Hospital in Mumbai. This 15,000 sq ft facility is among the largest of its kind in a government hospital in Western India. Further, BKT has featured on the Wall of Giving at Tata Memorial Hospital in Mumbai. This is in recognition of its long-standing commitment to supporting access to high quality care . This has been evidenced based on... This is an evidence-based and affordable cancer care center. In ad9dition, as a testament to our comprehensive efforts on the ESG front, we have established an S&P Global Corporate Sustainability Assessment score of 58.
This places us amongst the leading tire manufacturers in terms of sustainability performance. In the sports engagement, I'm happy to share that BKT Tires is the official partner with all the five women's IPL teams franchises in a landmark multi-team deal for 2026 season. This partnership will expand our cricket footprint via our association with every Women's Premier League team of India, thereby strengthening, further strengthening our brand visibility and reinforcing our commitment to sports and also to women's sport. Let me update you on the CapEx front. During the quarter, we have commissioned a new line of carbon black, taking the total capacity to 265,000 metric tons per annum. All remaining CapEx is progressing as per schedules. With this, I now move on to operational highlights.
For the quarter, our volumes stood at 80,620 metric ton, a growth of 6% year-on-year. For 9 months, volumes stood at 231,536 metric tons, a minor degrowth of 1% year-on-year. Our standalone revenue for the quarter stood at INR 2,682 crores, registering a growth of 4% year-on-year. This includes realized loss of forex pertaining to the sales of INR 47 crores. For 9 months , the standalone revenue stood at INR 7,762 crores, registering flat on year-on-year basis. This includes a realized loss on foreign exchange pertaining to sales of INR 117 crores.
The standalone EBITDA for the quarter was at INR 605 crores, a margin of 22.5%. For 9 months, the standalone EBITDA was at INR 1,760 crores, registering a de-growth of 11% year-on-year. However, the margins for H1 stood at 22.7%. Profit after tax for the quarter was recorded at INR 375 crores, while for 9 months we have recorded a PAT of INR 927 crores. Our CapEx spends for the 9 months of this financial year was approximately INR 2,200 crores. As on 31 December 2025, the gross debt and cash and cash equivalents were INR 3,649 crores and INR 3,012 crores respectively. Accordingly, we have a net debt of about INR 637 crores.
The board of directors has declared a third interim dividend of INR 4 per equity share, in addition to the INR 8 already paid in the previous two quarters. With this, I now conclude my opening remarks and leave the floor open to Q&A.
Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Mumuksh Mandlesha with Anand Rathi. Please go ahead.
Yeah, thank you, sir, for the opportunity. Just firstly, on the, we've seen the Europe market turning positive this quarter. It's been seeing good growth this quarter, and I think some of the market like Germany seems to have done well. I just want to understand you mentioned about macro challenges, but still, we've seen a very good growth in the Europe. What could be factors that led to the rebound, sir?
So, I think, overall, they're anticipating the season to begin from this year, so that could have been the cause, and as I mentioned in my earlier comments during the last quarter, that a lot of the destocking had leveled out, so it could be due to that.
Going ahead, sir, I mean, considering macro challenges, should Europe be a factor kind of demand, sir?
It's too early to make a call on the long term.
Yes, sir. Got it, sir. So, on America volume, sir, how much would it be now, sir, U.S., sir, and has the volume started there, and any impact of tariff on the margins, sir?
Overall, Americas is being there in the investor presentation. The exact U.S. sales is down as compared to previous year, but the exact numbers are not handy.
Any impact of tariffs, sir, in our margin numbers, sir?
Yeah, obviously, because we have shared with distributors, but the large portion is being borne by them.
Got it, sir. Sir, on the CapEx side, they say already we have done INR 2,200 crore, which was the guidance last shared, for the year. Can you update on what is the CapEx for the full year now, and also any expectations for next year?
Maybe about INR 300-400 crore more in the current financial year, and the balance would be in the next year.
Got it, sir. And sir, on the commodity side, sir, how do you see the trend there? And, if you can share the euro-INR rate for the Q3, and, how do you see the hedges ahead?
So, the euro rate for Q3 was at about approximately 97 INR.
How do you see ahead, sir?
Should marginally improve from here.
Got it. On the commodity side, sir, how do you see the trend ahead?
So, oil is going up, moving, and natural rubber is also moving up, but it is too early to say what will be the impact.
Got it, sir. Thank you so much for the opportunity.
Thank you. The next question comes from the line of Siddhartha Bera with Nomura. Please go ahead.
Yeah. Thanks for the opportunity. Sir, my first question is, again, on this EUR-INR rate. I mean, we had close to 91 last year, and it has gone up to 97 now. So, can you talk about how the European realizations have been? Because it's a significant improvement on the hedge dates, but we have not seen much change in our ASPs or margins. So, some thoughts there. And current rate is significantly higher. So, are there significant hedges which which leads to a lower rate for you for next year? Or why are you sort of indicating only modest increase for next year?
So, firstly, the Europe share has gone down, so that has had an impact. Also, as we maintain that we always have a forward hedge, so that is also playing out. For next year also, the same hedge would be continuing.
Okay. But, in terms of European realizations, have they remained stable or has there been any change in that also? Hello?
Yeah. Realizations are same. There has not been a significant movement on that.
Okay.
But so having said, Siddhartha, having said that, the last quarter's realizations were around 91, 92, this quarter is 97, and still we are giving that it will improve from here. But because if you see in last 10 months, the euro have run up from 90 to 110. Even after December, for last 25 days, it has run up by INR 5. So because we are running forward positions, so we are saying that the entire gain will not be captured in the rates.
Okay. Okay, got it. And sir, on the India business, now, I mean, we have seen a pretty strong growth consistently now for the last few years. This quarter seems to be even stronger. So anything here which is driving this? I mean, apart from the industry growth, any customer additions or any market share gain, if you can talk about, and how do you think this plays out for the next year?
As I've mentioned in my opening comments, the positive impact by the government's role in reducing the GST has driven the sentiments, and that is what is driving in the entire auto sector, and we are getting the benefits of that.
Understood. And,
Also, the good-
Yeah.
Also, the good rains which were there in the season have led to better demand.
Okay. And, does higher India share have a negative impact on the ASPs or margins, or there is no much change? If you can just guide us.
Yes, it does have an slightly lower ASP. But if you see after all that, also with the enhanced level of India, the EBITDA levels are at par with what they've been in the past, so it is nullifying the overall effect.
Got it, sir. Sir, last question is on the CV foray. We had talked about that the pilot which will start from this quarter. So, any thoughts now, how should we think about the ramp up to be next year? What percentage of our volumes can come from this EV segment?
So, as we have mentioned, all in my opening comments, all the projects are going as per schedule, so the CV will also come up in this quarter. We'll make the announcements as once we are ready, so we're not anticipating any delay on that. As far as the ramp up goes, we have a plan which we are working to. It would be too early to sort of give any light on that at the moment. But we are quite confident of keeping our long-term vision of 2030, and we are working towards that. It'll be too early to comment on a quarterly basis what will be the impact, but we are quite confident of our long-term vision.
Understood, sir. Thanks a lot. I'll come back in the queue.
Thank you. The next question comes from the line of Raghunandan with Nuvama . Please go ahead.
Thank you, sir, for the opportunity. Sir, firstly, with reference to the
I'm sorry. There is a lot of... Yes, sir, there's a lot of background disturbance. And can you please use your handset?
Is it better now?
Yeah, better.
Yes.
Thank you.
Yeah. Thank you, sir. Thank you for the opportunity. Firstly, sir, with reference to the Europe trade deal, can you indicate what is the existing duty and how much reduction in duty can be anticipated because of the deal?
Current duty is 4%, and it is not very clear what will be the duty after this duty, unless we see the fine print of the agreement.
Got it, sir. In the rest of the world regions, which markets are mainly facing decline, sir?
So I think it is, you know, South America would be there, and Asia also a little bit.
Got it, sir. And, how much would be the freight cost as a percentage of revenue in Q3, and how do you see the outlook forward?
I think we, it's around 5%, and we look at it to be stable at the moment.
Got it, sir. Last quarter, I think it was over 6%, so there has been an improvement here. It is positively supportive.
It fluctuates, fluctuates, you know, depending on which country has got more of the exports and where it is gone. But this is the range, it's going to be in this range only. There's not going to be significant movement upward or downward.
Understood, sir. And within our expenses, is there any cost, which we are also factoring for the efforts towards the CV and CV4A? Is there any product development or other costs which are part of our financials?
nothing significant to note, I mean, to highlight over here.
Understood, sir. And, lastly, sir, on the CapEx, will FY 2027 CapEx also be in a similar range to 2026, around that INR 2,600-odd crore?
No, we are in, as we mentioned, we are not seeing an overrun, so out of the total amount that we had committed from the budget, about INR 2,500-2,600 would be done in this financial year, and the balance would be done in that financial year.
Understood, sir. Understood. Thank you, sir. Thank you so much. Wishing you all the best.
Thank you. The next question comes from the line of Abhishek Jain with Alpha Accurate Advisors. Please go ahead.
Thanks for the opportunity, sir. Sir, how much is the current inventory in the U.S. and European market? And, how would be the outlook for the U.S. and Europe in the fourth quarter?
So, we are seeing that the channel stock is at par at where it should be, and going forward, it is difficult to comment because of the volatility across the world with the geopolitical scenarios, how it plays out, so it will be very difficult to make a comment on how we see it. We hope that it plays out well, but too early to comment on that.
So, sir, I have heard that inventory is quite low in the US, and you have started to increase the numbers in the US. From this quarter, we have seen a strong growth in the US on a quarter-on-quarter basis. But still it is declined 30% on year-on-year basis. So just wanted to understand, what is your strategy for the US market? Are you waiting for these tariff issues to be resolved, and then you can start to ramp up the volume? Or, you will continue to see the gain in the market share in the US?
So, as I mentioned in my opening comments, because of our strong brand positioning and quality, and some, or rather big, some major chunk of the tariffs to be shared between us and our channel partners, we have been able to gain some of the momentum that we had lost in the Q2, has come back in Q3. And too early to comment on what would be the change or how the tariffs would play out, because we, as of now, there is nothing unchanged in that scenario. So, once things change, we will have to relook at our strategy. At the moment, we are trying to just regain some of the lost momentum that we had in Q2.
So, how much impact on the margin on the U.S. business because of this, you are taking some hit on the and absorbing some sort of the tariff by yourself. So, how much impact on the overall margin because of that?
I'm not able to quantify it on a public call, so these are business details.
Okay. And, sir, how much difference in the realized and the margin export versus domestic market now?
As I mentioned in my comments earlier, it is marginally lower. Again, I'm not going to quantify that. Thank you.
Okay. Sir, my last question on the carbon black plant. Sir, as you have increased your capacity to 265,000, sir, so just wanted to understand how much would be used for the captive use and how much for the external sales, and what kind of the revenue and EBITDA margin we can see on this business?
This entire quantity is for the outside sale, because whatever internal consumption is there, that we were able to make from the earlier capacity. The margin is why it will be as per industry average.
Okay, sir. Thank you. That's all from my side.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to 2 per participant. The next question comes from the line of Yash Agarwal with Nirmal Bang Securities. Please go ahead.
Sir, just wanted to understand on the U.S. tariff, like, how much has been passed on to the dealers and how much we are bearing the impact of it?
Yash, I'm sorry. As I mentioned earlier, these things I'm not able to quantify on a public call, but we are sharing the cost, is being borne between both of us. That's all what I can comment.
Okay, sir, that's it from my side.
The next question comes from the line of Aditya with Old Bridge Mutual Fund. Please go ahead.
Yeah, thank you for the opportunity, sir. Sir, my first question would be on the India market. So, I just needed some sense on how we should see this market, how we should see these volumes split between agriculture and construction segment, if you can give us some sense there.
It's roughly about 60/40 between industrial, construction and agri. Very rough approximation.
Industrial, construction-
Industrial construction side would be about 60%, and 40% agri.
Okay. Okay, that's super clear. Second question is, sir, on the U.S. business, of course, we have done pretty well as compared to expectation in the U.S. business. So, can you give us some sense on the end consumer demand for these tires in U.S., and how is the farm level activity as compared to last year or a year back today, and where are we there in that cycle?
So, as we are all aware that U.S. is a net importer, so that would continue. As far as for us, it's you know, it's of course a challenge to with the tariffs that we have been put up with. I mean, we've you know, as a country, we've been put with. So, we are trying to navigate through these scenarios. It's difficult to comment on how the momentum would be going forward, because we don't have for certain what how long this will continue for, whether it goes up, goes down. But whatever is enforced on the country and being law-abiding citizens, we will make try and make the best of that scenario.
Okay. Okay. No, I mean, I wanted to just, like, get some sense, like, how is the farmer level activity in terms of crops? Is the output down or is the end level activity down or significantly down over last year, which is impacting the end consumer demand? Is that also a case, a significant case, going on there this year?
No, not that we are aware of. It seems to be as per normal.
Okay, sir. Okay. Thank you. Thank you so much.
Thank you. The next question comes from the line of Chirag with Keynote Capitals. Please go ahead.
Yeah, thank you for the opportunity. So my first question is related to the carbon black sales. What percentage of our revenue came from carbon black this quarter?
It is less than 10%.
Secondly, could you update how has been the utilization of the advanced carbon black machinery assets, and what kind of volumes are coming from there?
It's still not very significant, but yes, we are able to get the sample approvals from many places, and in the coming quarters, it should improve.
Got it. So, my second question is related to the Indian market itself. Now, in Indian market, could you just highlight what is the right to win for any new company which is getting into commercial vehicle and passenger vehicle as a segment? And what is the reason for Balkrishna would be, that we would be able to significantly gain the initial 2%-5% of the passenger and commercial vehicle market? As in my understanding, it is a competitive industry, where even the low-price players are not able to penetrate into market the way the branded, larger players have. So just wanted to understand your point of view on this.
Yeah, Chirag, we have spoken about it in the past. I don't know whether you were on that call or not, but, we hope to deliver a better value proposition to the market, to the root of the product, channel, brand, end user, value. So all these put together, I think we should be able to deliver a better value proposition than what the market is experiencing currently.
Got it. Got it. So just last question. If I am able to bifurcate the OHT industry into three parts: agriculture, mining, construction and industrial. Just wanted to understand, is Balkrishna present into the industrial tires as a segment?
Yes.
Got it. Got it. That is it from my side. Thank you, sir.
The next question comes from the line of Pramod Amte with InCred Capital. Please go ahead.
Yeah, hi. Thanks for taking the call. So two questions. One, with regard to U.S. market, who is, with the duties and all, who are the competitors who are gaining at your cost? And you feel, once, as and when the duty is normalized, you should still have a right to regain it back. Which countries or which manufacturers? How to see it.
So as, as per competitor activity, we, generally don't comment, and we'll refrain from doing so. Regarding BKT's policy, we believe that we are building the foundations and keeping everything intact to when the scenario changes, we will be ready to regain the momentum that was there. And actually, if you see our previous, comments, commentary, we have always mentioned that, the, North America is a driver of, growth for us. So we are keeping everything ready to come back to that market when it, when things improve there.
Second question is with regard to the new projects. When we visited last time, similar time to the client, you had some conveyor type of tires, which you were planning as a new project and also specialty carbon. Any update in terms of client acceptance and orders on the same?
So regarding the carbon black, as Bajaj has mentioned, that it is a work in progress, and, as we had mentioned, the ramp-up would take time because of acceptance, but, every day we are getting newer acceptance, so in the coming quarters, that should work. Regarding the conveyor, that you saw were actually what we call tracks, rubber tracks. So that is what was there. Rubber tracks is a work in progress again, and as we are you know, moving ahead, we are trying, I mean, our product is under validation at OE's, and that is expected in the coming quarters, so that should then also ramp up.
Thanks a lot.
Mr. Pramod, does that answer your questions?
Yeah. Thank you.
Okay. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
We thank everyone for taking the time out and coming to hear us, and looking forward to seeing you in the next quarter. Thank you. Have a-
Thanks.
Safe trip.
Thank you. On behalf of Balkrishna Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.