Balkrishna Industries Limited — Q4 FY26 earnings call

Call held 9 May 2026

Management summary

Balkrishna Industries reported a resilient Q4 and FY26, achieving its highest ever annual OHT volumes despite macroeconomic uncertainties. The company saw sequential volume improvements, particularly in Europe and Americas, and made significant strides in expanding its carbon black and on-highway tyre businesses. While raw material price upticks and geopolitical factors impacted Q4 margins, management is confident in its long-term growth strategy, supported by substantial capex plans and a focus on product diversification and sustainability.

Highlights

  • Q4 OHT sales volume grew 5% year-on-year to 85,820 metric tons, contributing to the highest ever annual volumes in FY26 at 317,356 metric tons.

  • Commissioned new carbon black line, reaching full utilization at 265,000 MTPA, and increased captive power plant capacity to 64 MW.

  • Successfully entered the truck bus radial segment and re-launched 2-wheeler tyres, with positive early market response.

  • Achieved a 58 CSA score, reinforcing its position among leading Indian tyre manufacturers in sustainability performance.

  • Recommended a final dividend of INR 4 per equity share, in addition to INR 12 paid over the previous 3 quarters.

Concerns

  • Macroeconomic uncertainties continue to persist, impacting the external environment.

  • Raw material price upticks are being witnessed due to supply chain disruptions, leading to potential margin pressures in the near term.

  • Q4 standalone EBITDA margin of 22.9% was impacted by headwinds from geopolitical scenarios and their effect on the supply chain.

  • FY26 standalone EBITDA registered a degrowth of 10% year-on-year, with PAT at INR 1,222 crores.

Key financials

2 periods

Q4

  • OHT Sales Volume
    85,820 metric tons
    YoY +5%
  • Standalone Revenue
    ₹2,894 Cr
    YoY +2%
  • Standalone EBITDA
    ₹663 Cr
  • EBITDA Margin
    22.9%
  • PAT
    ₹295 Cr

FY26

  • OHT Sales Volume
    3,17,356 metric tons
  • Standalone Revenue
    ₹10,656 Cr
    YoY 0%
  • Standalone EBITDA
    ₹2,423 Cr
    YoY -10%
  • EBITDA Margin
    22.7%
  • PAT
    ₹1,222 Cr

What they filed

Q1 FY27: revenue up 25.2%, net profit up 56.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,420 2,560 2,752 2,760 2,393 −1%2,737 +7%2,933 +7%3,455 +25%
EBITDA580 601 614 506 511 −12%643 +7%640 +4%744 +47%
Net profit347 449 369 288 273 −21%382 −15%299 −19%451 +57%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹2,800 Cr New plan — additional capex for OHT and on-highway expansion, automation, and sustainability initiatives
    • New carbon black facility (total capacity 265,000 MTPA)
    • Increased power plant capacity at Bhuj (64 MW)
    • Phase 1 of commercial vehicle radial tyre project (CVR) adding 800 tyres per day fungible capacity ₹750 Cr
    • Balance carbon black project (total capacity 360,000 MTPA)
    • Phase 2 of commercial radial vehicle tyre project and PCR tyre project
    • Additional capex for capacity expansion and infrastructure development across OHT and on-highway tyre categories, automation, and sustainability initiatives ₹2,000 Cr
    Our capex spend for the year was INR2,800 crores approximately. The Board of Directors has approved an additional capex of INR2,000 crores, which will support capacity expansion and infrastructure development across both OHT and on-Highway tyre categories. Al enabled automation across on-highway tyre category, and also the company's sustainability initiatives.
  • Debt Gross ₹4,049 Cr · Net ₹895 Cr
    As on 31st March, the gross debt and cash and cash equivalents were INR4,049 crores and INR3,154 crores, respectively. Accordingly, we have a net debt of INR895 crores.
  • Dividend ₹4/share (final)
    The Board of Directors has recommended a final dividend of INR4 per equity share, subject to shareholder approval at the upcoming AGM. This is in addition to the INR12 that we have paid per share for the previous 3 quarters.
  • Liquidity Cash ₹3,154 Cr
    As on 31st March, the gross debt and cash and cash equivalents were INR4,049 crores and INR3,154 crores, respectively.

Guidance & targets

Capacity

  • Total Carbon Black Capacity Capacity · Q1 FY27 · High confidence 360,000 MTPA

    From 265,000 MTPA today

    I'm 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 '26. We are now targeting the balance part of carbon black capacity to come on stream in Q1 of financial year '27.

    — Rajiv Poddar

  • CV Radial Tyres Capacity (Phase 1) Capacity · current · High confidence 800 tyres per day
    The TBR capacity you mentioned was 800 tyres per day. Would that be right, sir? That is for the Phase 1.

    — Rajiv Poddar

  • CV Radial Tyres Capacity (Total) Capacity · future · High confidence 3,800 tyres per day

    From 800 tyres per day today

    How much will it increase to? To about 3,800. So 800 tyres per day now, and it will increase to 3,800 tyres per day. Is that understanding, correct? Yes, yes.

    — Rajiv Poddar

  • PCR Tyres Capacity (Phase 1) Capacity · end of calendar year · High confidence 6,700 tyres per day
    So we will start around the end of the year, calendar year, as Rajiv mentioned. And in the first phase, we should be getting to 6,700 tyres. 6,700 tyres per day capacity, correct? Yes.

    — Satish Sharma

Revenue

  • On-Highway Business Revenue Revenue · by 2030 · High confidence INR 5,000 crores
    So our stated vision is INR5,000 crores revenue by 2030. We are holding on to that position.

    — Satish Sharma

Margin

  • EBITDA Margin Margin · sustained levels · High confidence 23-25%
    As we have mentioned in the past, we are, as a company, looking to keep sustained EBITDA levels, which we will continue to do.

    — Rajiv Poddar

Capex

  • Total Capex Capex · till FY29 · High confidence INR 6,800 crores
    So you said additional INR2,000 crores capex, which has been announced now. So with that, how much are we expecting the total capex for FY '27? In this financial year, between INR1,500 crores to INR1,800 crores. So to answer the first question first, yes, this is including what we have already spent. So how much of the INR6,800 crores have you already spent? Around INR3,000 crores. Okay. So only INR3,800 crores is left for the remaining three years, which is '27, '28, '29? Yes.

    — Rajiv Poddar

  • FY27 Capex Capex · FY27 · High confidence INR 1,500 crores to INR 1,800 crores
    In this financial year, between INR1,500 crores to INR1,800 crores.

    — Rajiv Poddar

Volume

  • US Volume Contribution Volume · FY27 · High confidence 10%

    From just short of 10% today

    That is our ambition, and that is what we are targeting for the year. It was just short of 10%, but close to that number.

    — Rajiv Poddar

What to watch in Q1 FY27

Raw Material Price Impact & Price Hikes

next quarter
Current RM prices up 4-5% in Q4, expected 7-8% more in Q1 FY27; price hikes of 3-5% taken, targeting another 2%
Target Effectiveness of price hikes in offsetting RM cost increases and actual margin trajectory

Why it matters

Raw material costs are a significant headwind, and the company's ability to maintain margins depends on successful price realization.

Raw material prices has gone up by approximately 4%, 5% for the last quarter, the quarter which we ended. This quarter, approximately, it may go up around 7% to 8% more. So price hike, we have taken between 3% to 5% already across various geographies, and we are targeting around 2% in this very month, towards the end of this month. And we'll continue to watch this, and maybe we may have to take further price hikes.

Risks & concerns

  • Macroeconomic uncertainties

    medium

    Macroeconomic uncertainties continue to persist, impacting the external environment, though the company remains confident in sustainable growth.

    Management acknowledged

  • Raw material price upticks

    medium

    Raw material prices have gone up by 4-5% in Q4 and are expected to rise by another 7-8% in Q1 FY27 due to supply chain disruptions.

    Management acknowledged

  • Geopolitical scenarios and supply chain disruptions

    medium

    Geopolitical scenarios are impacting supply chain and contributing to headwinds, affecting Q4 margins and leading to caution in providing guidance.

    Management acknowledged

  • Near-term margin pressure

    medium

    Due to raw material cost pressures, there could be some margin pressure in the near term, despite efforts to pass on costs through price hikes.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Volume guidance for OHT and new CV radial tyres Evasive
So 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.

Management explicitly declined to provide specific volume guidance for the OHT business or the newly launched CV radial tyres, citing geopolitical uncertainties, which indicates caution despite positive H2 performance.

Asked by Siddhartha Bera

Impact of commodity basket on Q4 and Q1 FY27 margins and price hikes Direct
Raw material prices has gone up by approximately 4%, 5% for the last quarter, the quarter which we ended. This quarter, approximately, it may go up around 7% to 8% more. So at this moment, we are seeing the pressure to come. We are evaluating the situation and see how much we can pass on. But at this moment, we may have some price pressures, margin pressures.

Management provided specific figures for raw material price increases (4-5% in Q4, expected 7-8% more in Q1 FY27) and acknowledged potential near-term margin pressure, indicating a challenging cost environment.

Asked by Raghunandhan

Total capex for FY27 and breakdown of the additional INR 2,000 crores capex Direct
I'll read my commentary again, the Board has approved additional capex of INR2,000 crores, which will create capacity expansion and infrastructure development across both OHT and on-highway tyre categories, Al-enabled automation across on-highway tyre 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.

Management clarified the strategic intent behind the additional INR 2,000 crores capex, detailing its allocation across OHT, on-highway, automation, and sustainability, emphasizing long-term cost efficiency and scalable growth.

Asked by Pramod Amthe

On-highway business distribution network and ramp-up strategy Direct
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. It will be in line with the sales ramp-up.

Management confirmed that the primary distribution network for the new on-highway categories is largely in place, with dealership expansion tied to sales ramp-up, suggesting a phased and controlled market entry strategy.

Asked by Pramod Amthe

US volume contribution and impact of 10% tariff Direct
That is our ambition, and that is what we are targeting for the year. It was just short of 10%, but close to that number.

Management confirmed their ambition to reach 10% volume contribution from the US in FY27, indicating confidence in overcoming tariff impacts and growing in the market.

Asked by Raghunandhan

On-highway business value proposition and market share strategy Partial
Our price positioning is at par with the market leaders. 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.

Management stated their pricing strategy for on-highway tyres is 'at par with market leaders' and relies on product quality and operational excellence for market share gains, rather than aggressive discounting.

Asked by Sriram R

Recycled content in tyres and government policy Direct
See, government doesn't mandate anything on the recycled product to be used in the tyres. 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. No. Why should it? Otherwise, why would we use it?

Management clarified that government policy mandates buying EPR certificates, not using recycled content in tyres, and confirmed that using recycled content does not affect tyre performance, addressing a key sustainability and product quality concern.

Asked by Hardik Sharda

Increase in other expenses in Q4 and FY26 Direct
So as I mentioned in my opening remarks, this was our highest ever quarter and best number. So it is in line with that increased production, the other expenses to make those conversion costs, etcetera, which has been accounted for. So there is no theoretical jump. It is just the increased numbers because of the increased production.

Management attributed the increase in other expenses to higher production volumes in Q4, which was a record quarter, clarifying that it's not a 'theoretical jump' but a direct consequence of increased operational activity.

Asked by Vijay Pandey

3 min read 7 chapters

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.

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