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    Tolins Tyres Limited

    TOLINS
    Automobile and Auto Components·18 Nov 2025
    Management Summary

    Tolins Tyres reported a mixed Q2 FY26, with H1 revenue showing modest growth but Q2 experiencing a significant revenue and EBITDA decline due to GST-related purchase deferment. Management emphasized the temporary nature of the slowdown, with demand normalizing in Q3. New product launches, a substantial order from Tamil Nadu STU, and a new recycling project are expected to drive H2 recovery, alongside softening raw material prices.

    Highlights

    5

    • H1 FY26 Revenue grew 1.76% YoY to INR 155.8 crores, reflecting steady growth despite Q2 slowdown.

    • New tractor rear tyres are receiving encouraging feedback and expected to contribute meaningfully from Q3 FY26.

    • Secured an INR 50 crores annual order from Tamil Nadu State Transport for PCTR, which is a good margin business.

    • Terra Rubber recycling project with INR 2 crores capex is on track for commissioning by Dec 2025/Jan 2026, expected to reduce costs and improve PAT margins.

    • Raw material prices (rubber, crude-based products) are softening in Q3, expected to support margin improvement.

    Concerns

    3

    • Q2 FY26 Revenue declined 14.04% YoY to INR 66.1 crores due to GST-related purchase deferment, particularly impacting the PCTR segment (20-25% drop).

    • H1 FY26 EBITDA declined 25.57% YoY to INR 22.35 crores, and Q2 EBITDA declined 40.6% YoY to INR 8.91 crores, attributed to lower volumes, fixed cost absorptions, and volatile raw material prices.

    • Employee expenses doubled YoY from INR 2 crores to INR 4 crores in Q2, despite revenue decline, though management is addressing this.

    What Changed2

    vs Q4 FY26

    Guidance items4 → 6 (+2)Risks discussed5 → 3 (-2)
    Key financials

    Metrics

    11

    Periods

    2

    Headline

    6
    • H1 Revenue
      ₹155.8 Cr
      YoY+1.8%
    • H1 EBITDA
      ₹22.35 Cr
      YoY-25.6%
    • H1 EBITDA Margin
      14.3%
    • H1 PAT
      ₹16.22 Cr
      YoY-12.4%
    • H1 PAT Margin
      10.4%

    Q2

    5
    • Revenue
      ₹66.1 Cr
      YoY-14.0%
    • EBITDA
      ₹8.91 Cr
      YoY-40.6%
    • EBITDA Margin
      13.5%
    • PAT
      ₹6.92 Cr
      YoY-27.8%
    • PAT Margin
      10%

    Segment breakdown

    PCTR Segment
    -20% Q2 Volume Impact
    Agricultural Tyres
    ₹15 Cr Expected Business (Next 6 Months)
    Rubber Compound Business
    7% Share of PCTR Sales
    List

    Order Book

    high confidence

    Total Value

    ₹ 50 crores

    as of 2025-09-30

    quantified

    Execution

    executable over one year

    Composition

    PCTR(product)
    ₹ 50 crores100.0%

    "The INR 50 crore order from Tamil Nadu State Transport is for PCTR and is a good margin business, already factored into expectations."

    Source:
    Q&A

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    6
    CategoryTargetPriority
    Volume
    Q3 FY26 Volumes
    Back to Q1 levels
    		High
    Revenue
    Minimum Revenue Growth
    10%
    		Medium
    Revenue
    Q3 Revenue
    INR 90 crores
    		High
    Profitability
    Margins
    Maintained at previous years' levels
    		Medium
    New Products
    New Tractor Rear Tyres Contribution
    Meaningful pick up
    		High
    Capex
    Terra Rubber Project Commissioning
    Commissioned
    		High

    What to watch in Q3 FY26

    5

    Q3 FY26 Revenue/Volume Recovery

    Q3 FY26
    CurrentQ2 revenue INR 66.1 crores, volumes impacted by GST deferment
    TargetQ3 revenue closer to Q1 levels (INR 90 crores)

    Why it matters

    Verifies the temporary nature of the Q2 slowdown and the effectiveness of demand recovery post-GST.

    Q3, we are back to what we were in the Q1 positions. So, the volumes have picked up, and it is normalized.

    Risks & concerns

    3
    RiskSeverity

    GST-related purchase deferment

    Q2 sales were impacted by conscious postponement of buying decisions by dealers, distributors, OEM partners, and fleet operators in anticipation of tax revision, leading to a 20-25% drop in PCTR segment. — Management acknowledged

    medium

    Raw material price volatility

    Volatile raw material prices in the last two quarters contributed to margin pressure and EBITDA decline in Q2, though prices are now softening. — Management acknowledged

    medium

    Increased employee expenses

    Employee expenses doubled YoY in Q2, attributed to hiring skilled labor for Q1 growth; management is now working to optimize these costs. — Analyst acknowledged

    low

    Q&A highlights

    7

    “Somehow in the Arihant call, no mention was made of this that people are postponing. And now it seems like an afterthought. In any case, now, Mr. Tolin, going forward for FY '26, what is the realistic expectation for top line as well as for margins for the remaining year and for the full year? ... Sir, I don't recollect that, but then I am not disputing it. Always, we are maintaining the same that we will be performing 10% more.”

    Analyst challenged management on inconsistent statements regarding GST impact and a significant reduction in revenue growth guidance from 20% to 10%.

    asked by Keshav Garg

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Impacted by GST Revision

    Tolins Tyres reported a challenging Q2 FY26, with revenue declining 14.04% YoY to INR 66.1 crores, and EBITDA dropping 40.6% YoY to INR 8.91 crores. This slowdown was primarily attributed to GST-related purchase deferment, particularly affecting the PCTR segment, which saw a 20-25% volume drop. Despite the Q2 softness, H1 FY26 revenue showed a modest growth of 1.76% YoY to INR 155.8 crores, reflecting the underlying strength of the diversified business model.

    02

    Strategic Product Launches and Market Expansion

    The company is strengthening its product portfolio with the launch of new tractor rear tyres, which are receiving positive feedback and are expected to contribute meaningfully from Q3 FY26. Additionally, Tolins Tyres expanded its institutional client base and increased presence in rural and semi-rural geographies. The agricultural tyre business is projected to generate INR 15 crores in the next six months, including INR 3-4 crores from the new tractor rear tyres.

    03

    Operational Efficiency and Cost Management Initiatives

    Under the leadership of Mr. Cyrus Tolin, Head of Operations, manufacturing efficiencies have improved through process optimization, controlled overheads, and enhanced digital visibility. These steps helped mitigate the impact of lower Q2 volumes. The company is also addressing a doubling of employee expenses in Q2 (from INR 2 crores to INR 4 crores) by optimizing skilled labor and exploring automation.

    04

    Raw Material Trends and Margin Outlook

    Raw material prices, including natural rubber and crude-based products, remained largely stable in H1 but contributed to margin pressure in Q2. However, management noted that raw material prices are now softening in Q3, which is expected to support margin improvement in the coming quarters⏳. The company aims to maintain its margins at previous years' levels, despite the top-line fluctuations.

    05

    Outlook for H2 FY26 and New Projects

    Management expressed optimism for H2 FY26, anticipating stronger performance driven by GST clarity, pricing replacement demand, and contributions from newly launched products. Volumes are expected to normalize📎 to Q1 levels (around INR 90 crores revenue) in Q3. The new Terra Rubber recycling project, with a capital investment of INR 2 crores, is slated for commissioning by December 2025 or January 2026, aiming to recycle 3-5% of production scrap to reduce costs and enhance PAT margins.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.