Detailed Narrative
Q4 and FY26 Performance Overview
Balkrishna Industries reported Q4 FY26 OHT sales volume of 85,820 metric tons, a 5% year-on-year growth. For the full fiscal year, OHT volumes reached a record high of 317,356 metric tons. Standalone revenue for Q4 stood at INR 2,894 crores (up 2% YoY), while full-year revenue was INR 10,656 crores (flattish YoY). Q4 EBITDA was INR 663 crores with a margin of 22.9%, impacted by geopolitical headwinds and raw material price upticks. Full-year EBITDA was INR 2,423 crores (down 10% YoY) with a margin of 22.7%, and PAT for FY26 was INR 1,222 crores.
OHT Business Performance and Market Dynamics
The OHT business showed continued sequential improvements in volumes, driven by gradual normalization across key markets. H2 performance was significantly better than H1. Europe saw good recovery, and the Americas market showed improving traction with higher channel activity. India continues to outperform all markets, and the company is cautiously optimistic for this geography given the IMD weather forecast for the upcoming monsoon season. The company aims to achieve 10% volume contribution from the US in FY27.
Carbon Black Business and Capacity Expansion
The carbon black business recorded marginal revenue growth in FY26, with third-party sales contributing approximately 9% of overall business. In December '25, the new carbon black line was commissioned, bringing total capacity to 265,000 MTPA, which is now fully utilized. The company is targeting the balance part of carbon black capacity to come on stream in Q1 FY27, aiming for a total capacity of 360,000 MTPA. Captive power plant capacity at Bhuj was also increased to 64 MW in February '26 to ensure energy circularity.
Entry into On-Highway Tyre Segments
BKT has made significant progress in its long-term growth roadmap by entering the truck bus radial (TBR) segment with new product launches in February '26, aligning with infrastructure growth and radialization trends. The company also re-launched 2-wheeler tyres targeting the domestic market. Distribution networks are being built, and products are being placed in the market with focused marketing campaigns. The company plans to introduce passenger car radial (PCR) tyres by the end of the current calendar year, with an initial capacity of 6,700 tyres per day in the first phase.
Capital Expenditure and Funding
Total capex spend for FY26 was approximately INR 2,800 crores. The Board has approved an additional capex of INR 2,000 crores to support capacity expansion and infrastructure development across OHT and on-highway tyre categories, including automation and sustainability initiatives. This additional capex is part of the total INR 6,800 crores capex planned till FY29, of which INR 3,000 crores has already been spent. The capex for FY27 is projected to be between INR 1,500 crores and INR 1,800 crores, with annual maintenance capex around INR 200 crores.
Raw Material and Margin Outlook
The company is observing raw material price upticks, with a 4-5% increase in Q4 and an expected 7-8% further increase in Q1 FY27, primarily due to supply chain disruptions. To partially offset this impact, BKT has implemented price hikes of 3-5% across geographies and plans another 2% hike. Management anticipates some margin pressure in the near term but aims to maintain sustained EBITDA levels between 23% and 25% through a superior product mix and pricing actions.
Sustainability and Corporate Governance
Sustainability remains a core focus, with the company's S&P Global Corporate Sustainability Assessment (CSA) score improving to 58 in FY25. As part of CSR, BKT has partnered to establish Narsee Monjee Skilltech University in Mumbai with a committed contribution of INR 25 crores, including a dedicated 'BKT School of Engineering and Technology'. The Board also approved Deloitte Haskins & Sells Chartered Accountants LLP as joint statutory auditor, reflecting a commitment to robust governance.