Balkrishna Industries Limited (BOM:502355)
India flag India · Delayed Price · Currency is INR
2,147.25
-43.90 (-2.00%)
At close: May 15, 2026
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Q4 25/26

May 9, 2026

Operator

Ladies and gentlemen, good day and welcome to the Balkrishna Industries Limited Q4 and FY 2026 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on 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 the 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 a touch-tone 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.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Thank you, Yusuf. Good morning, everyone, and thank you for joining us today. Along with me, I have Mr. Bajaj, Senior President and Director, Commercial and our CFO, Mr. Satish Sharma, Senior President and Director of Strategy and Business Development, Mr. Ravi Joshi, our Deputy CFO, Mr. Sushil Mishra, Head of Accounts, and SGA, our IR advisors. At the onset, let me start by saying we have been resilient in a challenging external environment. While macroeconomic uncertainties continue to persist, at BKT, we remain confident in our ability to deliver sustainable and profitable growth over the medium to long term. Our financial performance has remained stable, reflecting the strength of our integrated business model and disciplined cost management.

We are now witnessing raw material price upticks due to supply chain disruptions and are closely monitoring the situation while maintaining a steady balance between the supplier between superior product mix and price hikes to partially offset this impact. I shall now discuss the performance updates of each of our business. Let me first begin with our OHT business. We are pleased to report a quarter marked by continued sequential improvements in volumes, supported by gradual normalization across key markets. H2 performance was significantly better than H1. This resulted in a strong operational year for the company, where we delivered our highest ever quarterly volumes in Q4 and also the highest ever volumes annually in the financial year 2026. From end market perspective, in Europe, H2 showed good recovery over H1, driven by easing in channel inventories.

Similarly, in the Americas market, we were witnessing improving traction supported by higher channel activity. We have created a sharper focus in our go-to-market strategy for Americas in order to realize the true potential of the BKT product range in that market. India continues to outperform all markets and witness a sustained momentum. We are cautiously optimistic for the geography, given the weather forecast of IMD for the upcoming monsoon season. I shall now share some insights of our Carbon Black business. For the financial year 2026, our Carbon Black business recorded marginal revenue growth on year-on-year basis, with third-party sales at 9% of overall business. In December 25, we commissioned our new line for Carbon Black, taking the total capacity available to us at 265,000 KTA.

I am pleased to share that we have witnessed full utilization levels for the new lines, supported by a mix of internal consumption and external third-party sales. To ensure energy circularity model, company increased the captive power plant capacity at Bhuj to 64 MW during February 2026. We are now targeting the balance part of Carbon Black capacity to come on stream in Q1 of financial year 2027. In Specialty Carbon Black, we have already secured approvals for select grades across plastics, pressure pipes and power cables and inks. Moving to our On-Road Highway business. During the quarter, we continue to make progress on our long-term growth roadmap with a strong focus on product diversification and market expansion. We have entered the truck bus radial segment with the new product launches in February 2026.

This segment is aligned with infrastructure growth, increasing radialization trends, thereby helping us to tap the replacement market opportunities that lie for us. We have relaunched the two-wheeler tires, where we have introduced select products targeting domestic market. The distribution network and channel infrastructure for the On-Highway segment is being built, with products being placed in the market starting April 26, along with focused marketing campaigns with Ranveer Singh, our brand ambassador, to popularize our entry in these newer segments. The early response from the market has been encouraging, reflecting acceptance of our product quality and performance. Building on this momentum, the company plans to introduce the passenger car radial or PCR tires by the end of the current calendar year, following a phased and calibrated approach. At BKT, we see our entry in these newer segments as a strategic adjacency that complements our existing strengths.

At overall level, while macroeconomic uncertainties persist, we remain focused on the following: volume growth with margin discipline, leverage our Carbon Black capabilities to improve efficiency and quality, and lastly, to scale up progressively our Off-Highway business. Let me now share an update on the BKT brand. During the year, we undertook a repositioning of the BKT brand architecture by differentiating the corporate and the regular lines by adding tires and Carbon Black to product branding, aimed at making it more contemporary and emotional engaging while retaining its core attributes of performance and reliability. The same must have been noticed by all of you during the ongoing T20 League in India. Integrated product and brand-building initiatives across major digital and print platforms under the campaign Elevate Your Drive with our brand ambassador, Ranveer Singh, has received strong engagement and positive customer response.

These initiatives have enhanced brand recall, supported new product launches, and strengthened BKT's positioning across domestic and international markets. Let me quickly share insights on sustainability as highlighted in our FY 2025 report. As part of our long-term strategy, sustainability continues to remain a core focus area at Balkrishna Industries. During the financial year 2025, we have made steady progress across our ESG priorities. During the year, our S&P Global Corporate Sustainability Assessment, or the CSA score, improved to 58, reflecting the steady progress of sustainability initiatives taken by us and reinforcing BKT's position among the leading Indian tire manufacturers on sustainability performance. As a part of our CSR activities, we have entered into a partnership for establishing Narsee Monjee Skill Tech University in Mumbai through a committed contribution of INR 25 crores staggered over the next few years.

As a part of this initiative, a dedicated BKT School of Engineering and Technology will be set up, reinforcing the company's focus on promoting skill-based higher education aligned with our industry needs. Lastly, an important development as a part of commitment to robust governance, transparency and global best practices, the board has approved the appointment of Deloitte Haskins & Sells Chartered Accountants LLP as joint statutory auditor on the recommendation of the audit committee and subject to approval shareholder at the ensuing AGM. Moving on to our ongoing and new CapEx programs. As a part of our ongoing CapEx plans, we have completed the following: a new line of Carbon Black facility in Bhuj, taking our capacity to 265,000 KTA. Increase the power plant capacity in Bhuj from 40 to 64 MW.

In February 26, we completed phase I of this commercial vehicle radial tire project with a CapEx of INR 750 crore, adding fungible capacity of 800 tires per day for CVR/OHT. We are now working on the completion of the balanced Carbon Black project, which will take our overall capacity to 360,000 KTA, or phase II of the commercial radial vehicle tire project, and also the PCR tire project, which is scheduled to launch in FY 2027. These projects are expected to be completed as per schedule. The board of directors has approved an additional CapEx of INR 2,000 crore, which will support capacity expansion and infrastructure development across both OHT and on-road tire categories. AI-enabled automation across on-highway tire category and also the company sustainability initiatives.

This spend is intended to drive long-term cost efficiency, enhance operational resilience, improve sustainable performance, and create scalable platform for future growth. With this, I now move on to operational highlights. For the quarter, our OHT sales volume stood at 85,280 metric tons, a growth of 5% year-on-year. For the FY 2026, our volumes stood at 317,356 metric tons. Our standalone revenue for the quarter stood at INR 2,894 crores, registering a growth of 2% year-on-year. This, however, includes a realized loss on foreign exchange pertaining to INR 47 crores. For the FY 2026, standalone revenue stood at INR 10,656 crores, registering flattish performance on year-on-year basis.

This, however, includes realized loss on foreign exchange pertaining to sales of INR 164 crores. The standalone EBITDA for the quarter was at INR 663 crores with a margin of 22.9%. The margin was particularly impacted towards the end of the quarter on account of headwinds faced due to geopolitical scenario and its impact on supply chain. For the financial year 2026, the standalone EBITDA was at INR 2,423 crores. Registering a degrowth of 10% on year-on-year basis. The margin, however, stood at 22.7%. Profit after tax for the quarter was recorded at INR 295 crores, while for financial year we have recorded a PAT of INR 1,222 crores. Our CapEx spends for the year was INR 2,800 crores approximately.

As on 31st March, the gross debt and cash and cash equivalents were INR 4,049 crores and INR 3,154 crores respectively. Accordingly, we have a net debt of INR 895 crores. The board of directors has recommended a final dividend of INR 4 per equity share, subject to shareholder approval at the upcoming AGM. This is in addition to the INR 12 that we have paid per share for the previous three quarters. With this, I now conclude my opening remarks and leave the floor open to Q&A. Thank you.

Operator

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Raghunandhan N. L. from Nuvama Research. Please go ahead.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Good morning, sir, and thank you very much for the opportunity. For FY 2026, how much was the contribution of U.S. to volume? Considering that now the tariff is 10%, will we see U.S. going back to 10% of volume in FY 2027?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

That is our ambition, and that is what we are targeting for the year.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

How much was it in FY 2026, sir? Broad, approximately, if you can indicate.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

It was just short of 10%, but close to that number.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Understood. On the commodity basket, how much was the impact in Q4 and the expectation for Q1? If you can also indicate how much price hike has been taken so far.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Price hike we have taken between 3%-5% already across various geographies. We are targeting round two in the coming in this very month, towards the end of this month. We'll continue to watch this and maybe we may have to take further price hikes. Regarding the impact, I'll hand over to Mr. Bajaj.

Madhusudan Bajaj
Senior President , Director of Commercial, and CFO, Balkrishna Industries

Price. Raw material prices has gone up by approximately 4%-5% for the last quarter, the quarter which we ended.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

What would be the expectation for this quarter, sir? That is June quarter.

Madhusudan Bajaj
Senior President , Director of Commercial, and CFO, Balkrishna Industries

Quarter it should approximately it may go up around 7%-8% more.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Understood, sir. When you say 7%-8%, it is as a percentage of revenue or the raw material basket increasing by 7%-8%?

Madhusudan Bajaj
Senior President , Director of Commercial, and CFO, Balkrishna Industries

This is the-

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Raw material.

Madhusudan Bajaj
Senior President , Director of Commercial, and CFO, Balkrishna Industries

On raw material prices.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Sir, does that answer your question?

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Yes. Thank you. On the freight cost, how much was the freight cost in Q4 as % of revenue, given the geopolitics, and how do you see it for future?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

It was about 4.5%-5%, and we expect it to go up marginally the way things are, subject to no further disruption.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Got it, sir. One question.

Operator

Sorry to interrupt, Mr. Raghunandhan. May we please request you to rejoin the queue, sir, for the follow-up question.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Sure.

Operator

Thank you.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Thank you very much.

Operator

Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address all the questions from the participants, please restrict yourselves to two questions only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Siddhartha Bera from Nomura. Please go ahead.

Siddhartha Bera
Analyst, Nomura

Yeah. Thanks for the opportunity, sir. Sir, first question is on this outlook. You said that in the second half, you have seen pickup in Europe as well as North America is also improving. Given this backdrop, for the next year, would it be possible to give some volume guidance? How much are we expecting for the OHT business? On that, I mean, given that we have now started CV radial tires also, some color there, how much are we expecting to sort of sell in FY 2027?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We stopped giving guidance due to the geopolitical scenarios and uncertainties, but we are of course expecting growth, but we don't give guidance on that.

Siddhartha Bera
Analyst, Nomura

Thank you. About the, sir, CV radial tires.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

The business has just begun and we are hopeful to reach our stated vision by 2030, and we are working towards that.

Siddhartha Bera
Analyst, Nomura

Understood. Sir, on the CapEx side, you said additional INR 2,000 crore CapEx, which has been announced now. With that, how much are we expecting the total CapEx for FY 2027?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

In this financial year, about between INR 1,500 crore-INR 1,800 crore.

Siddhartha Bera
Analyst, Nomura

Okay, understood. Thanks. I'll come back if necessary.

Operator

Thank you. Next question is from the line of Pramod Amte from InCred Capital. Please go ahead.

Pramod Amte
Analyst, InCred Capital

Yeah, hi. Thanks for taking my question. If I have to look at your presentation slide 16, you are talking about overall CapEx till FY 2029 of INR 6,800 crores. This includes the recent announcement of INR 2,000 crores?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Yes.

Pramod Amte
Analyst, InCred Capital

Where is this incremental INR 2,000 crore going into? Your vision was anyway put out for FY 2030. Is it going into some surprises in CapEx cost or you are adding more molds? What is the actual vision of almost 30% in CapEx?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

As I'll read my commentary again. The board has approved additional CapEx of INR 2,000 crores, which will create capacity extension and infrastructure development across both OHT and on-highway tire categories, AI-enabled automation across on-highway tire categories, and the company's sustainability initiatives. This spend is intended to drive long-term cost efficiency, enhance operational resilience, improve sustainability performance across the company, and also create a scalable platform for the future growth.

Pramod Amte
Analyst, InCred Capital

It's a combination of both CapEx and the productivity improvement, if I heard you right.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Yes. Yes, sir.

Pramod Amte
Analyst, InCred Capital

Okay. Thanks. Second one, since the capacity is coming on stream now for CV almost ready and cars should be end of the year, what is your current distribution network? How much you plan to increase by end of the year? Can you give some sense?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

I'm Satish Sharma this side.

Pramod Amte
Analyst, InCred Capital

Yes.

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

The primary distribution in the form of distributors is nearly complete for both the categories, and the number of dealerships will be added as per the ramp-up of sales.

Pramod Amte
Analyst, InCred Capital

It need to be significant, right?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

It will be in line with the.

Pramod Amte
Analyst, InCred Capital

Sorry, I didn't get you.

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

It will be in line with the sales ramp-up.

Pramod Amte
Analyst, InCred Capital

Okay. Sure. Thanks, and all the best. Thanks, and all the best.

Operator

Thank you. Next question is from the line of Arjun Khanna from Kotak Mutual Fund. Please go ahead.

Arjun Khanna
Analyst, Kotak Mutual Fund

Thank you for taking my question. The first question is on the American piece. There is a refund of the reciprocal tariffs. Just want to understand, have you filed for the refund? Will we get part of it? Or will the importer distributor get? If you could throw some color on this matter, sir.

Ravi Joshi
Deputy CFO, Balkrishna Industries

In U.S., we are the importer on record. Whatever process is required, we have already filed. As of now, we have not received anything.

Arjun Khanna
Analyst, Kotak Mutual Fund

Fair. What is the quantum that we would have filed, sir?

Ravi Joshi
Deputy CFO, Balkrishna Industries

Quantum, as of now, I'm not handy with the number.

Arjun Khanna
Analyst, Kotak Mutual Fund

Sure. Since you're importer of the record, ideally it should come back to us. That's the fair understanding. Do we need to pass part of it to our dealer distribution?

Ravi Joshi
Deputy CFO, Balkrishna Industries

As a fair practice, obviously we are supposed to pass back part of it. What was recovered from the customers.

Arjun Khanna
Analyst, Kotak Mutual Fund

Fair. The second query is regarding the two-wheeler tires segment, which we have done a lot of marketing also on. What would our capacities be at this point in time?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Presently, we are having a capacity about 100,000 tires a month. Again, it'll go up as per the market response.

Arjun Khanna
Analyst, Kotak Mutual Fund

Sure. In terms of the outsourcing arrangements, what is the peak scale-up that we can do on this front?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

At the moment, we don't see it as a limiting factor.

Arjun Khanna
Analyst, Kotak Mutual Fund

Okay, perfect. Sir, just a last query is on the PCR side, which we have endeavored to launch by the end of this calendar year, as mentioned in the opening remarks. In the presentation, you talked of premium positioning. Could you help us understand what does this mean? Are we planning only on certain inch rim sizes? Are we looking at premium to the market leader, which I understand is Bridgestone? If you could just explain a little bit on the product positioning.

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Yeah. What it implies is that we are not discounting our products. We'll be in line with the market leaders. That's what it means.

Arjun Khanna
Analyst, Kotak Mutual Fund

Sure. Fair enough. Thank you and wishing you all the best.

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Thank you.

Operator

Thank you. Next question is from the line of Sagar Parekh from Renaissance Investment Managers. Please go ahead.

Sagar Parekh
Analyst, Renaissance Investment Managers

Yeah. Hi. Am I audible?

Operator

Yes, please go ahead.

Sagar Parekh
Analyst, Renaissance Investment Managers

Yeah. Hi. Thanks, thanks for taking my question. My question is on the on-highway tire strategy. Just wanted to make some sense. Could you, like, firstly give us qualitative aspect of how you are planning to, you know, scale up your on-highway overall? What would be the peak revenue and between TBR, PCR and the two-wheelers? Currently how many distributors are on board? If something on the qualitative side will be helpful.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Our stated vision is INR 5,000 crores revenue by 2030.

Sagar Parekh
Analyst, Renaissance Investment Managers

Right.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We are holding on to that position.

Sagar Parekh
Analyst, Renaissance Investment Managers

Right.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

The distribution, like I said, the primary distributors are all complete. We are about 90 in all, for this, these categories. The dealerships will be expanded as free, as per the sales rep.

Sagar Parekh
Analyst, Renaissance Investment Managers

Right. How would be the margins in this versus our off-highway?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

As we have mentioned in the past, we are as a company looking to keep a sustained EBITDA levels, which we will continue to do.

Sagar Parekh
Analyst, Renaissance Investment Managers

23%-25% is sustainable in your view, in spite of the on-highway scale-up?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

That is a company as a whole, yes, it is. That is we are yet maintaining our position.

Sagar Parekh
Analyst, Renaissance Investment Managers

Right. In terms of, like, near term, if I have to look at FY 2027, because of the raw material cost pressures, is it fair to say that near term there could be some margin pressure? Do you think that the price increases would fully, you know, mitigate the impact of the RM pressure?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

At this moment we are seeing the pressure to come. We are evaluating the situation and see how much we can pass on. At this moment we may have some price pressures, margin pressures.

Sagar Parekh
Analyst, Renaissance Investment Managers

All right. Yep. Thanks for taking my question. That's it.

Operator

Thank you. Next question is from the line of Vijay Kumar Pandey from Axis Capital. Please go ahead.

Vijay Kumar Pandey
Analyst, Axis Capital

Hi, sir. Before taking my question, couple of, sir, questions.

Operator

Mr. Vijay, your voice is very low.

Vijay Kumar Pandey
Analyst, Axis Capital

Am I audible now?

Operator

Yes. Please go ahead.

Vijay Kumar Pandey
Analyst, Axis Capital

Sir, wanted to check on the TBR tire. Do you expect this segment to start generating revenue from this quarter or will it be only in the later part of this year or later part of FY 2027? You can just let us know on this.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

The impact will be very, very insignificant in the first quarter, but thereafter it will start gaining in prominence.

Vijay Kumar Pandey
Analyst, Axis Capital

Okay. secondly, sir, in terms of the export guide, the export demands of Europe. In Europe, sir, certain OHT players, they are guiding for slightest to mid-single digit growth. Is our expectation also around that level to grow for FY 2027 or will it be lower? Just want to understand the dynamics in play there.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Vijay, as I mentioned earlier, we don't give. It's too volatile to give any guidance, and we'll continue to monitor. All we can say is that we are geared up to support the market as and when required. We are doing everything that we need to do to make sure we are in the best position to get market share whenever the market is there to get. This was firmly demonstrated in H2 of this last financial year.

Vijay Kumar Pandey
Analyst, Axis Capital

Sir, this INR 2,000 crore CapEx which we plan to do, this will be entirely for FY 2027 or it will be segregated between next two years?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

It will be staggered over the next few years.

Vijay Kumar Pandey
Analyst, Axis Capital

Okay. Okay. Thank you.

Operator

Thank you. Next question is from the line of Joseph George from IIFL Capital. Please go ahead.

Joseph George
Analyst, IIFL Capital

Thank you. Am I audible?

Operator

Yes, please go ahead.

Joseph George
Analyst, IIFL Capital

Yeah. My question is, in relation to the CapEx guidance that you have put out, INR 6,800 crores. Two questions on that. One is, does this amount, INR 6,800 crores, include anything that you have already spent? Or is that the number that we should think of from FY 2027 to FY 2029? That is the first question. Second question is Sorry?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

To answer the first question first is, yes, this is including what we have already spent.

Joseph George
Analyst, IIFL Capital

How much of the INR 6,800 have you already spent?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Around INR 3,000 crores.

Joseph George
Analyst, IIFL Capital

Okay. Only INR 3,800 crores is left for the remaining three years, which is 2027, 2028, 2029.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Yes.

Joseph George
Analyst, IIFL Capital

Okay. The second part of the question is, this is entirely project CapEx or does it include maintenance as well? If it doesn't include maintenance, how much should we think of maintenance per annum?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

This is only project and maintenance is about INR 200 odd every year, which will be extra. Which is also in the past has been always mentioned extra.

Joseph George
Analyst, IIFL Capital

Understood, sir. Thank you.

Operator

Thank you. Next question is from the line of Yash Agrawal from Nirmal Bang Securities . Please proceed.

Yash Agrawal
Analyst, Nirmal Bang Securities

Hi sir. Thank you for the opportunity. I just wanted to understand in the Carbon Black business, if you could share the split between captive consumption and the external sales. Additionally, what are the expected revenue contribution and EBITDA margin for this business?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

30% we are consuming locally from the current capacity and 70% is sold in the market. Margins are as per industry average.

Yash Agrawal
Analyst, Nirmal Bang Securities

Also the second on your revenue growth guidance by 2030. As you have mentioned in the PPT, like the five-year CAGR is 17%. In FY 2026, the last year sales was flat. Can you assume that the four-year CAGR would be above 20% to reach our revenue growth expectation?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

As the projects come on board, as the projects and capacities come on board, you'll see the jumps coming up. That is why it would be closer to the second part of the stated five-year vision.

Yash Agrawal
Analyst, Nirmal Bang Securities

Okay, sir. Thank you. That's all from my side.

Operator

Thank you. Next question is from the line of Siddharth from iThought Wealth Analytics LLP. Please proceed.

Siddharth Srikumar
Analyst, iThought Wealth Analytics

Hi, sir. My first question is, like, what is the company's thoughts on the on-highway tire segment, like long-term thought process behind entering this segment?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Long-term thought is that in, I mean, we are entering into an adjacent business which we see as a growth intensive, which provides sufficient growth levers to the company.

Siddharth Srikumar
Analyst, iThought Wealth Analytics

Okay. like, you, like you will be able to make the same kind of, return on capital in the off-highway and on-road.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

As we have mentioned, we look at it as a company as a whole, and we have maintained we will be able to keep our sustained, levels of EBITDA between 23% and 25%. That is our endeavor.

Siddharth Srikumar
Analyst, iThought Wealth Analytics

Okay. My second question is, like, what is BKT's positioning in U.S. and Europe in the VF tire category?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

In what ways are you asking?

Siddharth Srikumar
Analyst, iThought Wealth Analytics

Like, what is BKT's market position? Who's the number one? Who's the number two? Like that. Where does BKT stand there?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We have positioned ourselves as a premium player in that category. That's all we can answer for that.

Siddharth Srikumar
Analyst, iThought Wealth Analytics

Okay. Thank you.

Operator

Thank you. Next follow-up question is from the line of Raghunandan from Nuvama Research. Please go ahead.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Thank you, sir, for the opportunity. Sir, on the Euro INR, what was the realization for Q4, and what is the hedge rate for FY 2027?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Rupees. INR 99 for this quarter. For Euro.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Thank you. How do you see the hedge rate for FY 2027, given that current price is about INR 111?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

It will be higher than this year, but, it is not full year, so we are unable to

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

We should get a better realization compared to INR 99. Hopefully that will act as a support.

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

Definitely. Definitely better than that.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Understood, sir. Just a clarification, the TBR capacity you mentioned was 800 tires per day. Would that be right, sir?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

That is for the phase I. Sorry.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

How much will it increase to?

Satish Sharma
Senior President and Director of Business Development and Strategy, Balkrishna Industries

To about INR 3,800.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

To about INR 3,800.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

800 tires per day now, and it will increase to 3,800 tires per day. Is that understanding correct?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Yes. Yes.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Got it. On the PCR tires, how much capacity you'll be starting with in this year?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We will start around the end of the year, calendar year, as Rajiv mentioned. In the first phase, we should be getting to 6,700 tires.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

6,700 tires per day capacity. Correct?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Yes.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Thank you, sir. On the channel inventory, would the channel inventory be at normal levels currently or do you see that there was destocking which happened in FY 2026 and that would be an opportunity to do some restocking this year?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

No, we see it at normal levels.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Last question. In your opening remarks, you alluded to improving product mix as, and price hikes as, your efforts to, you know, support the margins. If you can elaborate on that, how is the product mix improving for us?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We are moving more towards the high-end, radialized products, the, specialized, products like IF, VF technology products. We are working on those as a product mix.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

What would be the share, sir, of radial tires in our mix?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

I don't have that handy with me.

Raghunandhan Nuwal Lakshminarayan
Analyst, Nuvama Research

Okay, sir. Thank you. Thank you for all the inputs, sir. Very helpful.

Operator

Thank you. Next question is from the line of Hardik Sharda from Mahavir AMC. Please go ahead.

Hardik Sharda
Analyst, Mavira AMC

Oh, yeah. Thank you for taking my question, sir. My question is regarding recycling of tires. How much of the content is, I mean, from percentage point of view, is required to be used in raw materials? Hello, am I audible?

Ravi Joshi
Deputy CFO, Balkrishna Industries

No, no, it's not. Your voice is coming muffled.

Hardik Sharda
Analyst, Mavira AMC

Is it clear now, sir?

Ravi Joshi
Deputy CFO, Balkrishna Industries

Better.

Hardik Sharda
Analyst, Mavira AMC

Yeah. My question is from a recycle point of view. As your total raw material, cost or content, how much is your, how much is the percentage of recycled content?

Ravi Joshi
Deputy CFO, Balkrishna Industries

We are as per industry norms.

Hardik Sharda
Analyst, Mavira AMC

Is it from a government policy point of view, is it stringent or, how is the on ground, you know, replication of the policy?

Ravi Joshi
Deputy CFO, Balkrishna Industries

Government doesn't mandate anything on the recycled product to be used in the tires. Whatever mandate is there related to it is EPR, when the producer is supposed to buy the certificate from the recycler, which is we are buying as per the norms. Hope that helps.

Hardik Sharda
Analyst, Mavira AMC

Okay. Yeah. Does it affect the performance of the tire?

Ravi Joshi
Deputy CFO, Balkrishna Industries

No.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Why should it? Otherwise, why would we use it?

Hardik Sharda
Analyst, Mavira AMC

Yeah. No, I thought, it's from a, you know, a circular economy point of view.

Ravi Joshi
Deputy CFO, Balkrishna Industries

Sir, sorry to interject. I'm repeating, government doesn't mandate any recycled product to be used in the tire. Hope I'm clear.

Hardik Sharda
Analyst, Mavira AMC

Okay.

Ravi Joshi
Deputy CFO, Balkrishna Industries

Government only mandate to buy a certificate, not the material. Those certificate are being used as per the bought as per the norms.

Hardik Sharda
Analyst, Mavira AMC

Okay. Okay.

Ravi Joshi
Deputy CFO, Balkrishna Industries

If I'm not using any recycled product or there is no mandate, how it will affect the performance? Right.

Hardik Sharda
Analyst, Mavira AMC

Okay. Got it. Got it. Understood. Understood, sir. You just have to buy the credits and not the recycled product. Understood. Understood. Yeah. Thank you. That was my question.

Operator

Thank you. Next question is from the line of Shriram R from Sampada Capital. Please go ahead.

Shriram Ramkumar
Analyst, Sampada Capital

Thank you for the opportunity. What will be the, you know, value proposition for us in the on-highway business? Like, in terms of retail pricing, what will be the average cost advantage versus the other players?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

I mean, it will be at par with the industry. What do you expect me to tell you on this?

Shriram Ramkumar
Analyst, Sampada Capital

No, no. What.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Our value proposition is.

Shriram Ramkumar
Analyst, Sampada Capital

Yeah, sure.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Please go ahead.

Shriram Ramkumar
Analyst, Sampada Capital

No, no. In terms of retail pricing, whether we'll be like 15% cheaper than the market leader or something on those lines. I mean, what are your thoughts on that?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Okay. Our price positioning is at par with the market leaders. On par with the market leader.

Shriram Ramkumar
Analyst, Sampada Capital

Okay. Okay. How do you expect to gain market share over there? What is your, route to entry?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We have faith on our product, quality and the value proposition that the product and the other operations excellence, points which are embedded in our strategy. I mean, in this earnings call, possibly we can't be explaining all those points to you.

Shriram Ramkumar
Analyst, Sampada Capital

Okay. You did mention that we need to incur about INR 3,800 crores of CapEx. What will be the source of funding for the same, sir?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Internal will be a mix of both. We are yet working on it.

Shriram Ramkumar
Analyst, Sampada Capital

Okay. In that case, like we have about INR 4,000 crores of debt in the books. Can we assume that it's peak debt that we have in the books today?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Sorry?

Shriram Ramkumar
Analyst, Sampada Capital

Can we assume that INR 4,000 crore is our peak level of debt, or will it go up?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

We can't assume anything. It's a volatile world. It's a moving world. Projects are being announced, so we can't assume anything. We'll keep on making announcements as and when we make changes to it.

Shriram Ramkumar
Analyst, Sampada Capital

Thank you. Thank you.

Operator

Thank you. Next question is from the line of Vijay Kumar Pandey from Axis Capital. Please go ahead.

Vijay Kumar Pandey
Analyst, Axis Capital

Sir, just a follow-up. Wanted to understand about the other expenses. The other expenses has moved significantly in this quarter and also for full year. If you can just highlight what is driving that, and how do you see that going forward?

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

As you, as I mentioned in my opening remarks, this was our highest ever quarter and best numbers. It is in line with that increased production, the other expenses to make those conversion costs, et cetera, which has been accounted for.

Vijay Kumar Pandey
Analyst, Axis Capital

Okay.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

There is no theoretical jump. It is just the increased numbers because of the increased production.

Vijay Kumar Pandey
Analyst, Axis Capital

Okay.

Operator

Thank you. Next question is from the line of Siddharth from iThought Wealth Analytics LLP. Please go ahead.

Siddharth Srikumar
Analyst, iThought Wealth Analytics

My question is answered. Thank you.

Operator

Thank you, sir. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Rajiv Poddar
Joint Managing Director, Balkrishna Industries

Thank you everyone for taking time out and joining us. We look forward to meeting you next quarter. Thank you.

Operator

Thank you so much, sir. On behalf of Balkrishna Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.

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