Balkrishna Industries Limited (BKT) is a leading Indian manufacturer of off-highway tires (OHT), specializing in agriculture, construction, industrial, and mining segments. Headquartered in Mumbai, BKT exports to over 160 countries and holds a strong global presence. The company focuses on innovation, carbon black integration, and expanding into new tire segments, targeting ₹23,000 crore in revenue by 2030.
Strategic Vision and Revenue Goals
BKT has laid out a 5-year strategic plan with a revenue aspiration of INR 23,000 crores by FY30.
The plan rests on three growth levers:
- Off-Highway Tire (OHT) Business: Targeting 70% contribution to enhanced revenue.
- Carbon Black Business: Targeting 10% contribution through third-party sales.
- Entry into New Tire Categories for India: Targeting 20% contribution.
Lever 1: OHT Business Expansion
BKT is a global leader in the agricultural tire sector.
Plans to strengthen its position across all geographies and expand its presence in rubber tracks, mining, industrial, and construction tires.
The rubber track segment has shown strong demand; a new plant will be operational in H2 FY26.
BKT is the only Indian company producing 57-inch all-steel radial mining tires, a significant technological achievement.
Aims to expand its global mining tire market share using its complete bias and radial portfolio.
Current production capacity: 360,000 MTPA; with capex and debottlenecking, will reach 425,000 MTPA, aiming for 8% global market share, with 10% as a long-term ambition.
Lever 2: Carbon Black Business
The carbon black product is well accepted by major global OEMs.
Focus on becoming a preferred strategic supplier to the tire industry.
Significant potential seen in non-tire applications, especially advanced carbon black.
Expansion planned from 200,000 MTPA to 360,000 MTPA; to be completed by early FY26.
Includes a 24 MW cogeneration plant, boosting total power capacity to 64 MW at Bhuj.
This plant supports cost efficiency and backward integration.
Lever 3: New Tire Verticals for Indian Market
BKT aims to enter the premium passenger car radial (PCR) and commercial vehicle radial (CVR) segments.
Initial focus will be on the replacement market in India.
Pilot launch for CVR: Q4 FY26; PCR pilot: Q3 FY27.
By FY30, these new verticals are expected to contribute 20% of sales, targeting a 5% market share in India.
Opportunity size: INR 80,000 crore non-OHT market in India.
Capital Expenditure
BKT has planned a capex of INR 3,500 crores over the next 3 years, mainly funded through internal accruals.
FY25 capex was INR 1,500 crores.
Existing approvals include 35,000 MTPA OHT capacity expansion.
Maintenance capex expected to be INR 500–700 crores/year.
Competitive Advantages
Integrated carbon black and power generation help reduce production costs.
Land, equipment, and in-house talent in place for scalable expansion.
Past brand-building investments in India will benefit future segments.
Expected blended EBITDA margins post-full commercialization: 23%–25%.
ROCE is expected to remain robust despite expansion.
Financial Performance (FY25)
Highest-ever annual sales achieved despite global macro headwinds.
Volume growth of 8% YoY: FY25 volume was 315,273 MT.
Standalone Revenue: INR 10,615 crores, up 13% YoY.
EBITDA: INR 2,682 crores; margin at 25.3%.
PAT: INR 1,628 crores, up 13% YoY, despite MTM losses and higher finance cost.
Net cash position: INR 115 crores as of March 31, 2025.
Final dividend declared: INR 4/share, total INR 16/share for FY25.
Future Outlook
BKT maintains a long-term focus, targeting sustainable, modular growth.
Confident in maintaining margin and return profiles, leveraging product mix and internal efficiencies.
Closely monitoring global geopolitical and trade scenarios, with readiness to respond to changing conditions.
Question and Answer Session Highlights
Q: What gives BKT confidence to enter competitive segments like PCR and TBR now?
A (Satish Sharma): Our success in Indian OHT over the last 5 years, with a 15%+ market share in agri replacement, gives us confidence. Also, our existing all-steel radial technology is transferable to TBR. The Indian market is growing, and we believe we can create differentiation through our strategy.
Q: Will marketing and brand investments increase due to the new segments?
A (Rajiv Poddar): No. We’ll maintain current marketing spend levels. As revenue scales, spend as a percentage will reduce, and cumulative brand benefits will kick in.
Q: Can you break down the INR 3,500 crore capex across segments?
A (Rajiv Poddar): Not yet, as the board has only approved the aggregate amount. Detailed allocation will be finalized over time.
Q: What is the capex plan for FY26?
A (Rajiv Poddar): Around INR 1,000 to 1,500 crores.
Q: What will be the capacity of TBR and PCR pilot plants? Will exports be considered?
A (Satish Sharma): TBR will utilize our existing mining TBR capacity. PCR will be phased in later. Initial focus is on the domestic replacement market; export and OEM plans may come later.
Q: Any volume guidance for FY26?
A (Rajiv Poddar): No guidance due to global volatility—trade wars, geopolitical tensions, etc.
Q: What is the status of the specialty carbon black line?
A (Madhusudan Bajaj): It started in September FY25 with trials underway. Full utilization expected by FY27.
Q: Are distributors holding more inventory ahead of tariff changes?
A (Rajiv Poddar): No. Inventory at distributor level is stable and at desired levels.
Q: With India’s tire market expected to grow beyond INR 1 lakh crore, will 5% market share be meaningful?
A (Satish Sharma): We believe so. Our strategy is modular. If market response is strong, we’ll evolve and scale accordingly.
Q: Can we assume INR 2,500 crores annual capex for FY26-28 combining new and old business?
A (Rajiv Poddar): Peak annual capex could be INR 1,500–1,800 crores. OHT capex will reduce post-expansion.
Q: Why not enter two-wheeler segment aggressively?
A (Satish Sharma): We already have a small presence and will grow gradually.
Q: How will BKT build new manufacturing expertise for PCR/TBR?
A (Satish Sharma): We’ll leverage existing synergies and develop required capabilities. The tire process isn’t drastically different.
Q: Are there niche segments within PCR/TBR BKT can tap into?
A (Rajiv Poddar): Yes. We aim to replicate our niche strategy here, focusing on premium segments to protect EBITDA margins.
Q: Can you share specifics on premium niches within PCR or TBR?
A (Rajiv Poddar): Too early to share details. We’ll disclose when execution begins.
Q: Is INR 3,000 crores capex enough for a ~INR 4,600 crore revenue addition?
A (Rajiv Poddar): Yes. We benefit from existing land, upstream equipment, and integration synergies.
Q: How are you managing the recent 10% U.S. tariff?
A (Ravi Joshi): It’s being partly absorbed and partly passed on to customers.
Q: What’s the outlook for raw material and freight cost in Q1 FY26?
A (Madhusudan Bajaj): Freight is stable. Raw materials are slightly down. Expect ~1% margin benefit QoQ.
Q: What’s the hedge rate for FY26?
A (Ravi Joshi): Not available now; will follow up.
Q: What are the carbon black margins?
A (Rajiv Poddar): No segmental disclosure provided.
Q: Is it focused on exports or domestic market?
A (Madhusudan Bajaj): Currently domestic-heavy; export share will rise.
Q: ASPs imply revenue potential of ~INR 13,000 crores, but you’re targeting INR 16,000 crores by FY30. How?
A (Rajiv Poddar): Through a combination of product mix, brand positioning, inflation, FX, and improved realizations.
Q: What drove the 3% QoQ improvement in realizations?
A (Rajiv Poddar): It’s due to better product mix and forex hedge rates, not price hikes.
Q: Why did margins fall despite benign RM costs?
A (Madhusudan Bajaj): As guided earlier, raw material costs peaked this quarter, leading to ~1–2% margin dip.
Q: What’s the long-term steady-state margin amid macro pressures?
A (Madhusudan Bajaj): Around 25% EBITDA margin is expected.
Q: Could new U.S.-Europe tariffs impact BKT significantly?
A (Rajiv Poddar): Too early to comment. We are monitoring developments.
Q: Do you use recycled content in tire manufacturing?
A (Rajiv Poddar): Yes, marginally. But we can’t disclose specifics due to proprietary formulations.
Q: Any regulation mandating recycled content?
A (Rajiv Poddar): Not currently