Ladies and gentlemen, good day, welcome to the JK Tyre & Industries Limited Q4 and FY 2026 conference call, hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be on the listen-only mode. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Chirag Jain, Deputy Head of Research from Emkay Global Financial Services Limited. Thank you, over to you, sir.
Thank you, Gitesh. Good afternoon, everyone. On behalf of Emkay Global, I would like to welcome you all to the Q4 FY2026 earnings conference call of JK Tyre & Industries Limited. Today we have with us from the senior management team, Mr. Anshuman Singhania, Managing Director, Mr. Arun K. Bajoria, Director and President, International, Mr. A.K. Kinra, Financial Advisor, and Mr. Sanjeev Aggarwal, Chief Financial Officer. We will begin the call with opening comments from the management team, followed by Q&A session. Over to you, sir.
A very good evening to everyone. Chirag has already introduced everybody in the room. I welcome you once again for JK Tyre Quarter four and FY 2026 earnings conference call. The Indian economy demonstrated a strong signs of resilience in a turbulent global landscape by achieving a GDP growth of 7.5 during FY 2026.
Strong domestic demand remained the key growth engine, which kept the economic momentum high, despite some slowdown towards the end of financial year on account of West Asia crisis, which has led to disruptions in supply chain of crude oil, petrochemicals, and other critical commodities, leading to an unusual surge in prices, thereby creating highly inflationary environment. GDP growth FY 2027 is expected to moderate at 6.9%, supported by healthy private consumption.
We are hopeful that the peace talks between U.S. and Iran emerge successful, bringing back much-awaited normalcy in the energy market and restoring the global supply chain by H2 FY 2027. FY 2026 has been a remarkable year for the Indian auto industry, as it has witnessed a robust double-digit growth and supported by series of structural policy reforms, including the GST and the personal tax reforms.
Softer interest rate scenario, improved rural income, a robust festive season, and continued focus on government on infrastructure investment, thereby improving the demand sentiment and consumer confidence. Similarly, export of vehicles from India has also performed extremely well and has registered a growth of 24% on year-over-year basis. India's electric transition has accelerated in FY 2026 as EV retail sales grew by 25% year-over-year basis across all segments, including passenger, commercial, and two three-wheeler.
Quarter four FY 2026 emerged as one of the best quarters in recent times of auto sector with all major OEM posting their ever highest sales with robust year-over-year growth across sectors. Currently, the auto and tyre sector is going through a rough patch owing to geopolitical instability and economic turbulence on account of West Asia crisis, posing challenges in availability and surge in prices of key inputs, thereby significantly increasing manufacturing cost and impacting the operating margins.
However, the macro fundamentals of the auto industry remains healthy, and we expect the demand momentum to continue in FY 2027. Coming to JK Tyre, I am delighted to share that FY 2026 has been a landmark year for JK Tyre. We delivered a record volume across segments, attaining the highest ever annual consolidated revenue of INR 16,384 crores, a healthy double-digit growth of 11%, and achieved an EBITDA of INR 2,089 crores, an increase of 25% over the previous year.
We are glad to share that we have crossed a record INR 1,000 crore PBT in FY 2026. This performance reflects the strength of our brands, operational discipline, and unwavering focus on value creation. We recorded a consolidated revenue of INR 4,233 crores in quarter four FY 2026, up by 12% on a Y-on-Y basis. Consolidated EBITDA for quarter four stood at INR 546 crores, registered a 42% growth. EBITDA margins was recorded at 12.9%, an expansion of 270 basis points.
This growth was driven by higher volumes and improved product mix and sustained cost optimization initiatives. In Q4, our average raw material basket witnessed an increase of 1.3% on a QoQ basis, while on a YoY basis, raw material cost remained range bound. There has been a pressure on input costs due to ongoing [west prices] and weakening of the rupee.
Keeping in view the ongoing situation, the raw material prices are expected to go up by 18% to 20% in Q1 of FY 2027 from Q4. To mitigate increase in raw material prices and sustain profitability margins, we have started increasing our selling price in a staggered manner. We have already taken a hike of 4% to 5% across products in the replacement market and 5% to 7% in the export market. The situation is being actively monitored for necessary further price increases to offset the increase in the raw material prices. OEM price increase will take with a lag effect.
During FY 2026, we have further strengthened our sales network and enhanced our market reach by adding 50 plus new brand shops. We have secured new approvals from India's leading OEMs including Tata Motors, Ashok Leyland, Mahindra, Switch Mobility, VECV, et cetera, for the new vehicles. During FY 2024, company has further expanded its premium range of farm tires by launching Shreshth Plus, reinforcing the company's commitment to advancing innovation for modern agriculture application to meet the evolving needs of modern farming.
JK Tyre remains committed to sustainability and continues to make measurable progress in its net zero journey. During FY 2026, we have been recognized amongst the India's most sustainable company, ranking top five in the automotive sector and highlighting this responsible manufacturing practices. At JK Tyre, premiumization represents both the market opportunity as well as strategic direction.
With evolving customer expectation, there has been a clear shift towards high performance and technology-led products, and thus we are constantly investing in R&D to deliver a differentiated offering across segments, including several patent filings. At JK Tyre, we see an immense potential for AI application. We have been implementing the usage of AI in manufacturing, processing towards paperless and connected plants.
With end-to-end digitalization across functions, we are expanding the deployment of a agentic AI solution to augment the decision-making and automate workflow. AI-driven personalization and advanced analytics are enabling deeper engagement across the sales ecosystem. Collectively, these efforts are being pursued as a part of multi-year digital and analytics transformation journey, fostering scalable and sustainable value creation and positioning JK Tyre as a future-ready organization.
Now, I would like to take you through some of the key operational highlights for Q4. Domestic markets recorded a healthy volume growth of 21%, led by robust 42% growth in the OEM market. Export demonstrated a resilience despite geopolitical uncertainty. However, on the full year basis, export volume grew by 5%. TBR volume in the replacement grew by 19% and OEM grew by 53% on a YoY basis. Passenger line volume grew by 16% on a YoY basis and contributed a replacement at 10% and OE at 26%. At the full year basis, export of PCR grew by 20%.
This growth has been contributed by increase of sale of premium tires, which has grown by 13% in the domestic market. Farm sector volume also saw a significant growth of 58% on a YoY basis, with 30% growth in the replacement market, OEM volume nearly doubled. Export also surged 44% on a YoY basis. Two, three-wheeler segment volume in the OE segment registered a high growth of 72%, and export jumped by 31% on a YoY basis. Replacement volume grew by 39% on a QoQ basis.
I am pleased to inform you that seeing the momentum in the demand growth, the board, in addition to the expansion projects which was announced earlier, in the tune of INR 1,130 crores under implementation, has been undertaking to further brownfield expansion of the PCR and TBR segment at an aggregated cost of INR 4,980 crores in a phased manner until 2029. This will increase our TBR and PCR capacity by 24%. Thank you. Now I will request Dr. Bajoria to talk about the performance of Tornel.
Thank you, MD Sir. I will begin with a brief overview of the operating environment in Mexico. For current year 2026, Mexico's GDP growth is projected in the range of 1.5% to 1.8%, driven by steady domestic consumption and a revival in investments. Additionally, the reaffirmation of Mexico's sovereign credit rating at BBB+ by S&P underscores confidence in the country's macroeconomic stability and long-term growth prospects.
On the monetary front, the Bank of Mexico is expected to resume its rate cut cycle, with policy rates likely trending towards 6.5%, which should further support economic activity and liquidity in the system. Manufacturing activity in Mexico continues to demonstrate notable resilience despite the ongoing geopolitical uncertainties. We expect a gradual recovery going forward, supported by increasing investments in technology and infrastructure sectors. JK Tornel delivered a resilient performance in FY 2026, making a meaningful contribution to JK Tyre's consolidated results.
This was driven by a favorable product mix, robust domestic demand, and improving customer sentiment across key segments. For FY 2026, revenue remained stable at INR 2,138 crore compared to INR 2,147 crore in FY 2025. Reflecting business resilience in a challenging environment, our wide product portfolio continues to strengthen customer preference and market positioning. JK Tornel continues to enjoy the highest market share in mass merchandise business.
EBITDA stood at INR 141 crore, and PBT grew by 63% to INR 61 crore, while PAT grew by 91% to INR 42 crore over the previous year. In the fourth quarter of FY 2026, revenue stood at INR 378 crore with EBITDA of INR 24 crore, marking a 36% year-on-year increase, highlighting improved operational efficiency. We are developing a new passenger line tire tailored for both Mexican and U.S. markets, which will strengthen our product portfolio and market reach.
Additionally, we have identified a new growth opportunity in our trading business through potential sourcing from Southeast Asia, and we have already initiated concrete steps in this direction. In line with our commitment to digital transformation, we are implementing a cloud-based AI-enabled platform, which will streamline processes, enhance automation, and significantly improve productivity and decision-making capabilities.
Looking ahead, trade ties with the United States remain strong, and we are optimistic about a favorable extension of the USMCA agreement, which is due for review in July 2026. With that, I would like to invite Mr. Sanjeev Aggarwal to take you through the financial performance of JK Tyre for the fourth quarter and full year of FY 2026. Thank you.
Thank you, Dr. Bajoria. Let me briefly share the key highlights for quarter four and full year of FY 2026. The first one is the company recorded a consolidated revenue of INR 4,233 crore in quarter four of FY 2026, which is up by 12% on YoY basis as against INR 3,780 crore in the corresponding quarter. For the full year of FY 2026, the highest turnover was achieved on consolidated basis, and this is INR 16,384 crore, marking an increase of 11% over the last year.
Consolidated EBITDA for quarter four was recorded at INR 546 crore, as compared to INR 384 crore, an increase of 42% on YoY basis. Similarly, for full year, the EBITDA stood at INR 2,089 crore, which is up by 25%. EBITDA margin in Q4 was recorded at 12.9% versus 10.2% in Q4 of FY 2025, representing an expansion of 270 basis points.
For the full year, the EBITDA margin stood at 12.8%. Raw material cost in Q4 was up by 1.3% on sequential basis. However, for the full year, it remained benign on YoY basis. Cash profit for Q4 FY 2026 surged by 69% and stood at INR 446 crore as against INR 264 crore in the corresponding quarter. For the full year, the cash profit was INR 1,661 crore, which is up by 38%.
Profit before tax for the financial year was up by 46% and stood at INR 1,043 crore as against INR 713 crore in FY 2025. Profit after tax for Q4 jumped 83% and stood at INR 188 crore as against INR 102 crore in Q4 of last year. For the full year, the profit after tax stood at INR 774 crore, which is up by 50%.
Installed capacities were fully utilized across segments, and for the full year at India level, the utilization was recorded at above 90%. In Q4, export volumes from India remained steady despite geopolitical uncertainties, including the ongoing West Asia crisis. However, in FY 2026, exports volumes were up by 5% vis-à-vis last year.
JK Tornel contributed significantly to the consolidated financials of the company. Consolidated earnings per share in Q4 stood at INR 6.65 per share as against INR 3.47 per share last year. Return ratios, ROC and ROE, continue to remain robust and stood at 16.8%, 14% respectively. Consolidated debt as on 31st of March 2026 stood at INR 4,445 crore vis-à-vis INR 4,081 crore as on 31st of March, up by INR 364 crore as the availed term loans for expansion projects under implementation.
Out of the total debt, working capital borrowings reduced from INR 2,378 crore to INR 1,808 crore, which is a significant reduction highlighting efficient working capital management. Further, I would like to bring to your attention that the cash balance of INR 711 crore, which was there as on 31st of March 2026, has mostly been utilized for the expansion project, and the cash balance as on 31st of March 2026 was INR 301 crore.
This reduction of the cash balance was for the projects and basically raised against the QIP funds, which we did in December 2023. The balance sheet of the company continues to remain healthy with robust key financial ratios. Leverage ratios, net debt to equity and net debt to EBITDA have improved, compared to last year to 0.73x and 2.13x as on 31st of March 2026. We have already circulated our earnings presentation and which is available on our website as well as on the stock exchange website. You can now please continue with your question and answers. Thank you.
Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question my press star and one on their Touch-Tone phone. If you wish to remove your question from the question queue you may press star then two. All participants are requested to use handsets while asking the question. Ladies and gentlemen we wait for a moment while the question queue assembles. The first question is from line of Aditi Prajapati from Shah Capital. Thank you. Please go ahead. Hello, Aditi. Can you hear me?
Hello. Hello, sir. Congratulations for good set of numbers. I want to understand the market mix for Q4 and category mix for Q4.
In the market mix, in terms of the replacement, in the Q4, we are 63%, and in the OE 30%, and rest about 10% for the export.
Okay. In terms of category mix?
Truck and bus for Q4 consolidated around 56%. PCR is about 30%, and non-truck bias is about 13%, and two/three-wheeler is about 4%.
Sir, this is basis of consolidated revenue?
Yes.
On standalone terms?
Standalone terms, truck and bus is at 60%, and PCR is at 25%, and non-truck bias is about 12%.
Okay.
Two/three-wheeler would be about 5%.
Thank you so much, sir. On standalone basis our replacement share is 63%.
61%. Yeah.
OE is 30%?
Yes.
Thank you so much, sir.
Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Vijay Pandey from Axis Capital. Please go ahead.
Hi, sir. Thank you for taking my question. Sir, couple of questions. First question.
Sorry to interrupt, sir. Vijay sir, I would request you to speak a little bit louder, please.
Am I audible now?
Yes, sir. Thank you. You can go ahead.
Yeah. I wanted to check about the Mexico business. If I see the quarter-on-quarter, there was a significant decline in the EBITDA number. I just want to understand what is the driving factor, because EBITDA, you said in the opening remarks that it was going good. Was there any impairment or anything that led to a decline in EBITDA? If you can comment about Mexico.
Yeah, Mexico did witness a little sluggish growth. This was because due to the heightened geopolitical volatility and trade uncertainty, which was owing to the U.S. tariffs, which remained. However, the revenue FY 2026 remained steady, and stood at INR 2,138 crores, versus INR 2,147 crores in FY 2025.
Okay. Second sir, for the domestic India business, was there any price hike, any price increase taken in the fourth quarter, or it mainly came only from the April onwards, the 4% to 6% hike?
Yeah. We have already taken a price hike of about 4% to 5% across the segment in the replacement market and 5% to 7% in the export market. OEM, we have actually price increase comes at a lag effect, and further we have planned another 5% to 6% price increase.
All of this came in.
Sorry?
All of this came in the first quarter or was part of it also in the fourth quarter as well?
Mainly in the first quarter.
Okay. Sir, about the CapEx plan, what is your expectation for the next two years? This INR 60 billion CapEx, this will be including the INR 11.3 billion CapEx already announced in Q3. Also, if you can give a guidance about FY 2027 CapEx guidance, how you plan to fund it, will it be totally debt funded or how do you plan to do?
I can guide you overall. See, we had declared last quarter INR 1,130 crore of expansion plans for TBR mainly and the PCR. This was done because we are running almost at full capacity utilization as we mentioned earlier. Now we have also taken up, seeing the momentum in the demand growth, we have announced for another INR 50 billion of the expansion plan to be completed in three phases over the next three to four years.
The total expansion of INR 6,000 crore will be completed by FY 2029. The total cash outlay on a yearly basis would be roughly around INR 1,200 crore. Therefore, this will not make any dent on the cash availability with the company, which is going to be much more stronger.
In any case, we are also going to take debt, which you just mentioned. This debt is also being supported by higher amount of the EBITDA, which we are expecting to generate over the next 3-4 years. The position, the leverage situation in the company will remain quite comfortable, and also the leverage ratios will remain as what we have seen in the last two, three years time.
Okay.
Is that okay?
Just last one, if I may. Just wanted to check on the other income. It was slightly down.
Sorry, can you speak slightly louder?
Just wanted to check on the other income. Other income was down for the fourth quarter. Just want to understand any.
This is down because we had, as I mentioned earlier, INR 700 crore in our kitty, earlier which were invested and this fund we had raised from QIP in December 2023, which were marked only for the purpose of expansion. We have invested that fund, and we have withdrawn that fund from the fixed deposits, and we have used that fund for the purpose for which it was raised. That is the reason why this is not showing this year as much as the, let's say, the other income, interest income, as it was last year.
Okay. Thank you, sir.
Thank you.
I'll follow up.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Nandan Pradhan from Emkay Global. Please go ahead.
Hello, sir. Very good evening to the team.
Sorry to interrupt, sir. I would request you to speak a little bit louder.
Is this better? Does this help?
Yes, it does.
Yeah.
Thank you.
Good evening, everybody. Yeah. Congratulations on a good set of performance. Just first question from my side would be on the demand front. If you could shed some color on how the demand is trending in the underlying markets across CVs, TBRs. What are you hearing from the fleet operators? How is the order book coming through for the OEMs? That would be the first question.
The demand in the tire industry growth is expected to remain buoyant for FY 2027 on the back of healthy demand in the replacement and OE market. We have not seen any order books getting cut from any of the OEM, whether it be CV, passenger, or any other line. On the account of geopolitical uncertainty, there has been a little bit of uncertainty in the market.
Some supply chains have disrupted. However, the underlying structural demand remains intact, and we continue to be optimistic about FY 2027 in that fashion. The auto industries had a double-digit growth overall. In FY 2027, we see a strong and a mid-single digit in some categories coming in for FY 2027. I think more or less it's going to be in a good momentum.
Thank you, sir. The second question would be on the CapEx. As you mentioned, about INR 1,200 crores of outlay every year. This INR 5,000 crores essentially also involves the INR 1,130 crores that we had already announced and would be underway at the moment, right?
This is in addition to that.
This is an addition. You go over almost INR 6,000 crores. The INR 1,130 crores gets completed this year?
No, INR 1,130 crore will get completed by quarter three or FY 2028.
Okay. This 5,000-
We started working on it.
Understood. Got it, sir. Sir, lastly, like you mentioned on commodities, we do see some pressure. How are we looking at in terms of, say, Q1, Q2? Just to give some context, I think a peer had highlighted that there could be some demand moderation because of the price hikes that are being taken. If you could share your thoughts on the same in Q2 or H2.
No, on the raw material prices, we are seeing a increase. In Q1 alone, we are seeing nearly about 18% to 19% price increase. Going forward, actually, that will all be depending on the war. We are seeing some softening to an extent of the crude oil prices. This may have a positive impact on bringing down the raw material prices as we go forward from Q2, beyond Q2 onwards.
Thank you, sir. That's it from my side.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Chirag Jain from Emkay Global. Please go ahead.
Good evening, sir. Sir, just wanted to understand the pricing action. You mentioned about close to 5% price hike we have taken in the domestic market. How the overall industry has responded? Have the other players also taken sort of similar price hike? Any thoughts on the competitive scenario on the ground?
Yeah, sure. The competition also has in tune with the price hike. I would say they are also in the same range as what we have said.
Understood. We have seen one or two large players looking to enter the tyre industry. One of the off-highway player has announced big plans over the next few years with respect to TBR, PCR, and two-wheeler. How do we defend our competitive positioning over the next three to five years? Can you share some thoughts over here?
Look, in the commercial tires, in the CV, we are serving the largest OEM players in India, and we are a very strong share of business with them. Plus, we are commanding a lot of premium positioning and innovative products which we have given to the market. To the after-market, we are also quite entrenched all India.
We are very successfully having a fleet management program. Within that, selling Miles, which is the mobility solution business, that is a star product and offering to the consumer. There, we have definitely created a lot of strong boundaries and walls for other players to duplicate that. We are actually accelerating that offering in the market with lots of digital interventions. I think this is the piece of the CV.
In the passenger car, we are also entrenched in serving the large OEMs and to meet their norms is quite stringent. You have to invest in technology, across the products actually, to sort of come to their norms. There, we have also given the market a lot of innovative products like Puncture Guard, then smart tires, and even our premium offering in Levitas. We are well entrenched in the domestic market. We are continuously investing in our brand as well. I guess these are some of the areas in which we are definitely having a leadership position.
Understood. Just lastly, our expansion plan for the next five years, as you highlighted yesterday, has been largely centered around TBR and PCR, which is obviously our core areas. Any thoughts on the two-wheeler space or on the off-highway space? Do we have any major plans to ramp up that part of the business?
Yeah, sure. We are growing steadily in the two, three-wheeler space. We are right now increasing our productivity in our given space. Also, we are outsourcing tires in the two, three-wheeler, and we intend to increase our outsourcing to increase our presence for two, three-wheeler in the coming quarters.
Understood, sir. Thank you so much. I'll come back in the question queue.
Yeah. Thank you.
Thank you. The next question is from the line of Vijay Pandey from Axis Capital. Please go ahead.
Sir, on top. Thank you for the follow-up. Just want to clarify, you mentioned cash outlet for this year will be around INR 1,200 crores. The CapEx plan for next three years comes out to be around INR 6,000 crores. Just want to understand how they plan to do this.
Sorry, could you please complete your question? Yeah.
No, that's it.
INR 1,200 crore is, I mentioned, for FY 2027. Of course, if there is a requirement to spend more, that is definitely possible as you can very well see the kind of cash generation which we have today. Even in February 2026, we had cash generation of more than INR 1,600 crore. Right. Seeing all that, we expect that this cash generation over the years will increase further. The total amount of outlay includes also the loans which we will take.
The total amount of INR 6,000 crore of projects will have the debt to equity for the second project, which we have announced yesterday, of about 2:1. Right. We have to take the funds from the bank and also including our internal accruals. The total amount of the cash outlay of about INR 6,000 crore is definitely possible in next three to four years time.
Okay. Thank you very much.
Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Yeah, thank you. I think we have been able to resolve and address all your queries. This has been a very good interaction, as usual. I would like to thank you once again for all these questions. You can please get back to us in case of any further clarification required through email, which is already in the public domain. Thank you so much. I would now close the call. Thank you.
Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.