Detailed Narrative
Strong FY26 Performance and Growth Trajectory
Tinna Rubber concluded FY26 with robust financial growth, achieving a 23% CAGR in revenue, 37% in EBITDA, and 34% in PAT over the past three years. Consolidated EBITDA margin improved by 206 bps to 17.1%, with Q4 FY26 EBITDA margin exceeding 18% on a revenue of INR 157 crores. The company also reported an all-time high tire processing volume and a 13% increase in tire crushing volumes to 155,000 tons per annum, reflecting strong operational performance.
Capacity Expansion and New Projects Driving Future Growth
The company expanded its tire-crush capacity in India by 9% to 185,000 tons in FY26 and targets a further increase to 235,000 tons by FY27. Capital expenditure for FY26 exceeded INR 100 crores, with an additional INR 100 crores earmarked for FY27-28. New projects, including the successful commencement of a pyrolysis plant and the commissioning of an rCB plant (with approximately INR 40 crores capex), are expected to be fully operational by Q3 FY27 and contribute INR 50-55 crores in revenue in FY27.
Strategic Focus on Value-Added Products and Margin Optimization
Tinna Rubber is strategically optimizing its product mix towards higher-margin offerings. The PCMB division, which contributed 4% to turnover in FY26, is targeted to increase its contribution to 8-10% in FY27, with a revenue projection of INR 75 crores for FY27. The polymer compounding facility in Haryana is being enhanced to 18,000 tons per annum by Q1 FY27. This shift is expected to maintain EBITDA margins in the 15-19% range for these new ventures, reinforcing the company's profitability.
International Expansion Amidst Geopolitical Headwinds
The Oman plant operated at 85% capacity utilization, generating INR 30 crores in revenue and achieving breakeven in FY26, despite higher raw material costs and export disruptions. GCC markets contributed 60% of sales, targeting 80% by Q1 FY27. While the South Africa project is expected to breakeven from Q2 FY27, plans for a 24,000 TPA Saudi Arabia plant (with INR 20-25 crores capex) have been delayed to Q2/Q3 FY27 due to Middle East geopolitical tensions, highlighting external risks.
Strengthened Financial Health and Shareholder Returns
The company's balance sheet strengthened significantly, with total debt declining 10% to INR 121 crores in FY26 from INR 134 crores in FY25. The net debt-to-equity ratio improved to 0.39 from 0.73, and the interest coverage ratio strengthened to 7.49 from 6.09. Operating cash flow grew by 60% to INR 57 crores. A final dividend of INR 3.25 per equity share for FY26 was recommended, reflecting a commitment to shareholder value.
EPR Credits and Resilient Raw Material Sourcing Strategy
EPR credits contributed approximately INR 29 crores in both FY25 and FY26, providing a stable and recurring revenue stream. The company employs a flexible raw material strategy, utilizing a combination of domestically-sourced and imported tires, with ratios adapting to prevailing prices and logistics. Despite increased import freight rates, Tinna mitigated cost rises by diversifying sourcing geographies and feedstock options, including passenger car radial tires, demonstrating robust supply chain resilience.
Vision 2029 Outlook and Strategic Objectives
Tinna Rubber reiterated its ambitious Vision 2029 targets of achieving INR 1,000 crores in revenue while maintaining EBITDA margins above 18%. Management expressed confidence in sustaining a 20-25% revenue growth in FY27, driven by ongoing capacity expansions and new product initiatives. The company's strategic focus on operational efficiencies, product mix optimization, and global presence is expected to underpin its long-term growth trajectory, despite near-term challenges in the infrastructure segment.