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Viaz Tyres Limited — Q4 FY26 earnings call

Call held 23 May 2026

Management summary

VIAZ reported robust financial performance for FY26, with significant revenue and profit growth driven by strategic expansion into the tyre manufacturing segment and improved operational efficiency. Despite margin pressures from raw material price hikes and a fire incident, the company is structurally cash flow positive and has ambitious growth targets for its new tyre and existing tube businesses, aiming for substantial revenue increase and market share gains in the coming years.

Highlights

  • Revenue from operations for FY26 reached ₹10,834.36 lakhs, representing a significant 89.2% year-on-year growth compared to ₹5,725.88 lakhs in FY25.

  • H2 FY26 revenue showed accelerated growth, jumping to ₹6,574.04 lakhs from ₹2,888.25 lakhs in H2 FY25, a massive 127.6% increase.

  • Absolute EBITDA for FY26 grew by 31.5% to ₹957.02 lakhs.

  • Consolidated profit after tax expanded substantially by 58% to hit ₹527.33 lakhs for FY26.

  • The company has structurally turned cash flow from operation positive, demonstrating strong operational cash generation and efficiency.

Concerns

  • Profit margins were impacted by raw material price hikes (rubber, reclaim rubber, chemicals) from September-October onwards.

  • EBITDA margins fell from 13% to 9% in H2 FY26, attributed to raw material price increases and a December fire incident.

  • Commercialization of the new plant might face a 2-3 month delay due to the global situation, though the target remains to start by Q4 FY27.

Key financials

2 periods

H2 FY26

  • Revenue
    ₹6,574.04 lakh
    YoY +127.6%
  • EBITDA Margin
    9%

FY26

  • Revenue
    ₹10,834.36 lakh
    YoY +89.2%
  • EBITDA
    ₹957.02 lakh
    YoY +31.5%
  • PAT
    ₹527.33 lakh
    YoY +58%

What they filed

Q4 FY26: revenue up 135.7%, net profit up 200.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue24 22 22 28 28 +19%29 +30%43 +94%66 +136%
EBITDA3 2 2 3 3 −2%4 +115%4 +72%5 +67%
Net profit2 1 1 1 1 −34%2 +292%2 +77%3 +200%
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 ₹50 Cr majorly funded through debt and equity
    • New manufacturing facility for two-wheeler, three-wheeler, LCV, and agri farming equipment segments ₹50 Cr
    We have put a capacity in the place for manufacturing of two wheeler segment, three wheelers, LCV, and agri farming equipment at the capex of nearly 50 crores. This was majorly funded through debt and equity.
  • Debt Debt disclosed
    • New borrowing Planning to take up debt for working capital as we move ahead with the facility.
    Actually, in working capital as we move ahead with the facility then we are planning to take up debt and other than that the markets that have credit period cycles so we are planning to synchronize that as well. This will be reflected in our numbers as well as we are planning to rotate money efficiently moving forward. Also in future whenever we reach the completion stage of plant at that time we are planning a fund raise as well that will be for marketing and working capital. So you can expect this anywhere near September-October.
  • Liquidity Liquidity disclosed Company has structurally turned cash flow from operation positive, showing strong metrics in operational cash generation and efficiency. The company has marginally improved its working capital cycle.
    Company has structurally turned cash flow from operation positive, showing a strong metrics in operational cash generation and efficiency. The company has marginally improved its working capital cycle and remained tight, tightly focus on further strength strengthening asset efficient to support sustainable non-diluting long-term expansion.

Guidance & targets

Revenue

  • Revenue from new tyre industry segment Revenue · next year · High confidence ₹125-150 crores
    So, in the future planning we are expecting that the capex we are doing now will be executed so post which based on our projections from next year we will be a part of tyre industry so we expect around 125-150crores of revenue target from tyre industry alongside this we are expecting 15-20% increase in tube segment.

    — Janak Patel, Managing Director

  • Increase in tube segment revenue Revenue · next year · High confidence 15-20%

    — Janak Patel, Managing Director

  • Overall revenue target Revenue · by 2029 · High confidence ₹350 crores
    So overall by 2029 we are expecting around 350 crores of revenue.

    — Janak Patel, Managing Director

  • Revenue from new plant Revenue · next year (FY27) · High confidence ₹160-170 crores
    We started factory in December 2025, at that time our target was that in 1 and half year that is 1st quarter of FY27 we will start commercialization but now we are revising that to November-December that by then we will start with trial run and after that the numbers will be reflected in the coming year by last quarter and in this we are expecting 160-170 crores of revenue.

    — Rajesh Patel, Whole Time Director & CFO

  • Revenue growth Revenue · this year (FY26) · High confidence 20-25%
    This year we are expecting 20-25% growth is expected in revenue and profit margin of 6-7%.

    — Rajesh Patel, Whole Time Director & CFO

Profitability

  • PAT margins from tyre industry Profitability · moving forward · High confidence 8-10%
    So, overall if we talk about tyres then on average 8-10% PAT margins is visible. So we are aiming to achieve that moving forward once the facility is operational next year proportionally.

    — Janak Patel, Managing Director

  • Tube segment margin increase Profitability · future · High confidence 1-2%
    In tubes also we are entering new segments of molds so our margins are expected to increase by 1-2%

    — Rajesh Patel, Whole Time Director & CFO

  • Profit ratio increase Profitability · moving forward · Medium confidence 2%
    So moving forward we will try to increase our profit ratio by 2 odd percent.

    — Rajesh Patel, Whole Time Director & CFO

  • Profit margin Profitability · this year (FY26) · High confidence 6-7%
    This year we are expecting 20-25% growth is expected in revenue and profit margin of 6-7%.

    — Rajesh Patel, Whole Time Director & CFO

Market Share

  • Market share in tyre industry Market Share · next 10 years · High confidence 6-7%
    So with respect to VIAZ we are expecting that we atleast reach 6-7% of market share in next 10 years because as of now we are small players there are big players like CEAT, Apollo, MRF so if we compare with them then we are expecting market share of 5-6% moving forward.

    — Rajesh Patel, Whole Time Director & CFO

Capacity

  • Asset turnover of new plant Capacity · going forward · High confidence 7x
    The plant is expected to give us a total asset turnover of 7x going forward.

    — Janak Patel, Managing Director

  • New capacity generation Capacity · High confidence ₹150 crores
    The expansion is expected to generate 150 crores so the expansion will be more than double. So, it the current capacity is of 100 crores on average so the new capacity will be of 160-170crores.

    — Rajesh Patel, Whole Time Director & CFO

  • New capacity total Capacity · High confidence ₹160-170 crores

    — Rajesh Patel, Whole Time Director & CFO

Capacity Utilization

  • New capacity utilization Capacity Utilization · next year · High confidence 60-70%
    Next year we will reach 60-70% almost and post that we will utilize 100%

    — Rajesh Patel, Whole Time Director & CFO

  • New capacity utilization Capacity Utilization · post next year · High confidence 100%

    — Rajesh Patel, Whole Time Director & CFO

What to watch in Q1 FY27

New Plant Commercialization

Q4 FY27
Current Trial run expected Nov-Dec 2026
Target Commercial operations commenced

Why it matters

Successful commissioning is key to realizing new revenue streams and market share targets in the tyre segment.

We started factory in December 2025, at that time our target was that in 1 and half year that is 1st quarter of FY27 we will start commercialization but now we are revising that to November-December that by then we will start with trial run and after that the numbers will be reflected in the coming year by last quarter and in this we are expecting 160-170 crores of revenue.

Risks & concerns

  • Raw material price volatility

    medium

    Raw material prices (rubber, reclaim rubber, chemicals) have hiked, impacting profit margins, but management expects improvement and has domestic sourcing ties.

    Management acknowledged

  • Delay in new plant commercialization

    low

    Commercialization of the new plant might be delayed by 2-3 months due to the global situation, though the target remains Q4 FY27.

    Management acknowledged

  • Fire incident impact on margins

    low

    A fire incident in December impacted margins for 1-1.5 months, but this was a one-time event and has been accounted for.

    Management acknowledged

Q&A highlights

8 direct
Sustainability of Cash Flow and Working Capital Improvement Direct
So sir in this we did good improvement in last year the debtor cycle was reduced previously the market was providing credit benefits even the working capital cycle was reduced significantly and this is expected to continue going ahead and is expected to be better moving forward.

Analyst sought clarity on whether the positive cash flow and working capital improvements were structural or one-time, which management confirmed as sustainable.

Asked by Dhaval Pandya

Impact on Profit Margins and Peer Comparison Direct
So the hike in reclaim rubber, rubbers and also based on current time there has been hike in purchase of goods, chemicals so that has affected the profit margins. It is expected to be better and sustainable moving forward.

Analyst questioned the decline in bottom-line despite good top-line, and management explained raw material cost pressures and expected future improvement.

Asked by Dhaval Pandya

Future Growth Plans and Revenue Targets Direct
So, in the future planning we are expecting that the capex we are doing now will be executed so post which based on our projections from next year we will be a part of tyre industry so we expect around 125-150crores of revenue target from tyre industry alongside this we are expecting 15-20% increase in tube segment. And we are also planning to start phase 2 of expansion by 2029 so in that also we will introduce LCV and agriculture segment in tyres so even in that we expect to generate 130-150crores. So overall by 2029 we are expecting around 350 crores of revenue.

Analyst asked about the company's long-term growth strategy, and management provided specific revenue targets for new segments and overall growth by 2029.

Asked by Dhaval Pandya

Market Share Target in Tyre Industry Direct
So with respect to VIAZ we are expecting that we atleast reach 6-7% of market share in next 10 years because as of now we are small players there are big players like CEAT, Apollo, MRF so if we compare with them then we are expecting market share of 5-6% moving forward.

Analyst inquired about the company's market share aspirations given its entry into the tyre industry, and management provided a long-term target.

Asked by Nakshi Mota

Differentiation and Margins in Butyl Tyre Industry Direct
Okay, so in butyl industry we are one of the top 5 companies in India and this market is also positioned well the tube industry works on 5-6% margins only in India and are expected to be sustainable in same lines in future as well. In tubes also we are entering new segments of molds so our margins are expected to increase by 1-2%

Analyst sought understanding of VIAZ's competitive position and margin potential in the butyl tyre segment, which management clarified with current margins and expected improvements.

Asked by Nakshi Mota

Raw Material Price Impact from Middle East Tensions Direct
So, actually as per our observations all over the India, that is the panic caused due to war so definitely the raw material impact has been there. And particularly if we look at it then plastic and rubber industry has been impacted significantly. So, with respect to VIAZ Tyres so most of our raw materials are sourced through India and have tie ups with good companies, like Birla. For butyls that is our raw material for that we have tie up with Reliance and for oils which requires a lot of quantity for that also we have tie ups with big vendors. So, the impact that the market has because of raw materials we will have relatively lower impact from that.

Analyst questioned the impact of geopolitical events on raw material prices and margins, and management explained their sourcing strategy and relatively lower impact.

Asked by Aditya

Managing Working Capital for Future Growth Direct
Actually, in working capital as we move ahead with the facility then we are planning to take up debt and other than that the markets that have credit period cycles so we are planning to synchronize that as well. This will be reflected in our numbers as well as we are planning to rotate money efficiently moving forward. Also in future whenever we reach the completion stage of plant at that time we are planning a fund raise as well that will be for marketing and working capital. So you can expect this anywhere near September-October.

Analyst asked about the strategy for managing working capital to support ambitious growth targets, prompting management to detail plans for debt and a future fundraise.

Asked by Aditya

New Factory Commercialization Timeline and Revenue Expectations Direct
We started factory in December 2025, at that time our target was that in 1 and half year that is 1st quarter of FY27 we will start commercialization but now we are revising that to November-December that by then we will start with trial run and after that the numbers will be reflected in the coming year by last quarter and in this we are expecting 160-170 crores of revenue.

Analyst sought clarification on the operational timeline and revenue contribution from the new factory, which management provided with revised dates and revenue targets.

Asked by Rahul

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Detailed narrative

Exceptional Financial Performance in FY26

VIAZ delivered a strong financial performance for FY26, with revenue from operations reaching ₹10,834.36 lakhs, marking an 89.2% year-on-year growth. The second half of FY26 was particularly robust, with revenue jumping 127.6% YoY to ₹6,574.04 lakhs. This growth translated into a 31.5% increase in EBITDA to ₹957.02 lakhs and a substantial 58% expansion in PAT to ₹527.33 lakhs, demonstrating strong operational cash generation and efficiency.

Strategic Entry into Tyre Manufacturing and Capacity Expansion

The company is making a strategic entry into the tyre manufacturing industry with a new 50,000 square feet facility in Nandasan. This facility, built with a capex of approximately ₹50 crores, will produce for two-wheeler, three-wheeler, LCV, and agri farming equipment segments. Management expects this new plant to generate a total asset turnover of 7x and contribute significantly to future revenue, targeting ₹125-150 crores from the tyre segment next year and an overall revenue of ₹350 crores by 2029.

Margin Pressures and Mitigation Strategies

Despite strong top-line growth, profit margins faced headwinds due to significant raw material price hikes (rubber, reclaim rubber, chemicals) from September-October onwards. This led to a decline in EBITDA margins from 13% to 9% in H2 FY26, further exacerbated by a fire incident in December. However, management noted that domestic sourcing ties with major players like Birla and Reliance helped mitigate some impact, and they expect margins to improve with revised pricing and a focus on increasing profit ratio by 2%.

Ambitious Growth and Market Share Targets

VIAZ aims for a 6-7% market share in the tyre industry within the next 10 years, leveraging its new manufacturing capabilities. In addition to the new tyre segment, the company anticipates a 15-20% increase in its existing tube segment revenue next year, partly driven by new molds expected to improve tube margins by 1-2%. The new plant is projected to contribute ₹160-170 crores in revenue in FY27, with commercialization expected to begin in November-December 2026.

Capital Allocation and Working Capital Management

The ₹50 crore capex for the new facility was primarily funded through a mix of debt and equity. To support the anticipated growth and increased working capital requirements, the company plans to take on additional debt and synchronize credit period cycles. A fundraise is also planned around September-October 2026 specifically for marketing and further working capital needs, ensuring sustainable, non-diluting long-term expansion.

Operational Efficiency and Future Outlook

VIAZ has structurally turned cash flow from operations positive and marginally improved its working capital cycle, indicating enhanced operational efficiency. Current capacity utilization in butyl tubes stands at 90-95%. For the new capacity, the company targets 60-70% utilization next year, eventually reaching 100%. Management expressed confidence in the company's growth trajectory, emphasizing a focus on higher-margin products and geographical expansion beyond current domestic presence.

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