Tinna Rubber and Infrastructure Limited

Tinna Rubber was honored with the prestigious Innovation Award 2025 by the Rubberized Asphalt Foundation for its pioneering work in India. The company has initiated a comprehensive lifecycle assessment study to measure greenhouse gas emissions from tire recycling, expected to be completed by Q4 FY26. Demonstrating a commitment to innovation, the Board has decided to allocate up to 3% of its PAT towards R&D expenditure to ensure future readiness.

The company reported a modest 3% dip in H1 FY26 revenue, primarily due to an extended monsoon and softer demand. However, EBITDA margin strengthened to 18.5% in Q2 and 17% in H1 FY26, driven by a strategic focus on enhancing profitability through selective reduction in low-margin product sales and conversion to higher-value products. The full-year FY26 revenue growth guidance has been revised to 10-15% over the previous year, down from an earlier target of INR 600 crores.

The Industrial segment delivered a healthy 19% YoY growth, supported by a 7% rise in exports. The Steel segment also showed encouraging growth with a 6% increase in revenue and 21% in sales volume YoY. While the Infrastructure segment faced a dip due to a focus on value-added products, the CRM business within it grew impressively by 75% in volume. The Consumer segment remained largely stable despite a marginal drop in volumes, with demand expected to grow in coming quarters.

The Oman plant is operating efficiently at 85% capacity utilization, generating INR 15 crores in revenue, with 40% of its output now sold within the GCC region. In Saudi Arabia, land has been secured for a 24,000-ton recycling facility, though project commencement is expected in H2 FY27, with current work two quarters behind schedule due to government consents. The South Africa joint venture, Mbodla Investments, has completed Phase 1 of capex and is expected to breakeven from March 2026, despite current losses.

A capex plan of approximately INR 100 crores is underway for completion by FY27, with INR 56 crores already incurred in H1 FY26. This includes INR 18 crores for the pyrolysis and rCB project and INR 9 crores for solar power expansion. The total cost for the pyrolysis and rCB plant, including civil infrastructure, is estimated at INR 50 crores. The company is expanding its renewable energy capacity from 1.23 MW to 4.48 MW by Q3 FY26, aiming to meet 50% of its power consumption from solar energy by FY26, which is projected to save INR 4 crores in FY26.

The company accrued approximately INR 15 crores in EPR credits for Q1 and Q2, with similar amounts expected for Q3 and Q4. Management clarified that EPR credits are now an integral part of the business and their capture can show quarter-on-quarter volatility based on when they reflect on the EPR portal. Regarding working capital, management downplayed concerns about increased receivables, stating an 8-day increase is not substantial and expects recovery in Q3.

Tinna Rubber aims for a strong 30% increase in export volume by Q4 FY26. Its Vision 2028 targets expanding its footprint from 6 to 10 locations, achieving a revenue CAGR of over 25% to reach INR 1,000 crores, and increasing profitability by over 33% with sustained EBITDA margins above 18% and ROCE of 30%. The PCMB business is expected to reach 33% capacity utilization by FY26 and contribute 5-6% to the top line in the next financial year, with the rCB project trials set to begin in early Q4.