Thank you, [Gitesh?] .

Good afternoon, everyone. On behalf of Emkay Global, I would like to welcome you all to the Q4 FY26 earnings conference call of JK Tyre & Industries Limited.

Today we have with us from the senior management team Mr. Anshuman Singhania, Managing Director; Mr.

Arun K. Bajoria, Director & President International; Mr.

A. K.

Kinra, Financial Advisor; and Mr. Sanjeev Aggarwal, Chief Financial Officer.

We will begin the call with opening comments from the management team, followed by Q&A session. Over to you, sir.

A very good evening to everyone. Chirag has already introduced everybody in the room.

I welcome you once again for JK Tyre Quarter 4 and FY26 earnings conference call. The Indian economy demonstrated a strong [sync?]

signs of resilience in a turbulent global landscape by achieving a GDP growth of 7.5% during FY26, as strong domestic demand remained the key growth engine, which kept the economic momentum high, despite some slowdown towards the end of financial year on account of West Asia crisis, which has led to disruptions in supply chain of crude oil, petrochemicals, and other critical commodities, leading to an unusual surge in prices, thereby creating highly inflationary environment. GDP growth FY27 is expected to moderate at 6.9%, supported by healthy private consumption.

We are hopeful that the peace talks between US and Iran emerge successful, bringing back much-awaited normalcy in the energy market and restoring the global supply chain by H2 FY27. FY26 has been a remarkable year for the Indian auto industry as it has witnessed a robust double-digit growth and supported by series of structural policy reforms, including the GST and the personal tax reforms.

Softer interest rate scenario, improved rural income, a robust festive season, and continued focus on government on infrastructure investment, thereby improving the demand sentiment and consumer confidence. Similarly, export of vehicles from India has also performed extremely well and has registered a growth of 24% on year-on-year basis.

India's electric transition has accelerated in FY26 as EV retail sales grew by 25% year-on-year basis across all segments, including passenger, commercial, and two-three-wheeler. Quarter 4 FY26 emerged as one of the best quarters in recent times of auto sector, with all major OEMs hosting their ever highest sales with robust year-in-year growth across sectors.

Currently, the auto and tire sector is going through a rough patch owing to geopolitical instability and economic turbulence on account of West Asia crisis, posing challenges in availability and surge in prices of key inputs, thereby significantly increasing manufacturing cost and impacting the operating margins. However, the macro fundamentals of the auto industry remain healthy, and we expect the demand momentum to continue in FY27.

Coming to JK Tyre, I am delighted to share that FY26 has been a landmark year for JK Tyre. We delivered a record volume across segments, attaining the highest ever annual consolidated revenue of ₹16,384 crores, a healthy double-digit growth of 11%, and achieved an EBITDA of ₹2,089 crores, an increase of 25% over the previous year.

We are glad to share that we have crossed a record 1,000 crore PBT in FY26. This performance reflects the strength of our brands, operational discipline, and unwavering focus on value creation.

We recorded a consolidated revenue of ₹4,233 crores in Quarter 4 FY26, up by 12% on a y-on-y basis. Consolidated EBITDA for Quarter 4 stood at 400 546 crores, registered a 42% growth.

EBITDA margins was recorded at 12.9%, an expansion of 270 basic points. This growth was driven by higher volumes and improved product mix and sustained cost optimization initiatives.

In Quarter 4, our average raw material basket witnessed an increase of 1.3% on a Q-on-Q basis, while on a year-on-year basis, raw material cost remained range-bound. There has been a pressure on input cost due to ongoing West crisis and weakening of the rupee.

Keeping in view the ongoing situation, the raw material prices are expected to go up by 18% to 20% in Q1 of FY24 from Q1 of FY27 from Q4. To mitigate increase in raw material prices and sustain profitability margins, we have started increasing our selling price in a staggered manner.

We have already taken a hike of 4 4% to 5% across products in the replacement market and 5% to 7% in the export market. The situation is been actively monitored for necessary further price increases to offset the increase in the raw material prices.

OEM price increase will take with a lag effect. During FY26, we have further strengthened our sales network and enhanced our market reach by adding 50-plus new brand shops.

Further, we have secured new approvals from India's leading OEMs, including Tata Motors, Ashok Leyland, Mahindra, Switch Mobility, VECV, etc., for the new vehicles. During FY24, company has further expanded its premium range of farm tires by launching Shreshth Plus, reinforcing the company's commitment to advancing innovation for modern agriculture applications to meet the evolving needs of modern farming.

JK Tyre remains committed to sustainability and continues to make measurable progress in its net zero journey. During FY26, we have been recognized amongst the India's most sustainable company, ranking top 5 in the automotive sector and highlighting this responsible manufacturing practices.

At JK Tyre, premiumization represents both the market opportunity as well as strategic direction. With evolving customer expectation, there has been a clear shift towards high performance and technology-led products, and thus we are constantly investing in R&D to deliver a differentiated offerings across segments, including several patent filings.

At JK Tyre, we see an immense potential for AI application. We have been implementing the usage of AI in manufacturing processing towards paperless and connected plants.

With end-to-end digitalization across functions, we are expanding the deployment of agentic AI solution to augment decision-making and automate workflows. AI-driven personalization and advanced analytics are enabling deeper engagement across the sales ecosystem.

Collectively, these efforts are being pursued as a part of multi-year digital and analytics transformation journey, fostering scalable and sustainable value creation and positioning JK Tyre as a future-ready organization. Now I would like to take you through some of the key operational highlights for Q4.

Domestic markets recorded a healthy volume growth of 21%, led by robust 42% growth in the OEM market. Export demonstrated a resilience despite geopolitical uncertainty.

However, on the full year basis, export volume grew by 5%. TBR volume in the replacement grew by 19%, and OEM grew by 53% on a y-on-y basis.

Passenger line volume grew by 16% on a y-on-y basis and contributed replacement at 10% and OE at 26%. At the full year basis, export of PCR grew by 20%.

This growth has been contributed by increase of sale of premium tires, which has grown by 13% in the domestic market. Farm sector volume also saw a significant growth of 58% on a y-on-y basis, with 30% growth in the replacement market, and OEM volume nearly doubled.

Export also surged 44% on a y-on-y basis. Two-three-wheeler segment volume in the OE segment registered a high growth of 72%, and export jumped by 31% on a y-on-y basis, replacement volume grew by 39% on a Q-on-Q basis.

I am pleased to inform you that seeing the momentum in the demand growth, the board, in addition to the expansion projects which was announced earlier in the tune of ₹1,130 crores under implementation, has been undertaken to further brownfield expansion of the PCR and TBR segment at an aggregated cost of ₹4,980 crores in a phased manner until 2029. This will increase our TBR and PCR capacity by 24%.

Thank you, and now I will request Dr. Bajoria to talk about the performance of Tornel.

Thank you, MD sir. I will begin with a brief overview of the operating environment in Mexico.

For current year 2026, Mexico's GDP growth is projected in the range of 1.5% to 1.8%, driven by steady domestic consumption and a revival in investments. Additionally, the reaffirmation of Mexico's sovereign credit rating at BBB+ by S&P underscores confidence in the country's macroeconomic stability and long-term growth prospects.

On the monetary front, the Bank of Mexico is expected to resume its rate cut cycle, with policy rates likely trending towards 6.5%, which should further support economic activity and liquidity in the system. Manufacturing activity in Mexico continues to demonstrate notable resilience despite the ongoing geopolitical uncertainties.

We expect a gradual recovery going forward, supported by increasing investments in technology and infrastructure sectors. JK Tornel delivered a resilient performance in FY26, making a meaningful contribution to JK Tyre's consolidated results.

This was driven by a favorable product mix, robust domestic demand, and improving customer sentiment across key segments. For FY26, revenue remained stable at ₹2,138 crores, compared to ₹2,147 crores in FY25, reflecting business resilience in a challenging environment.

Our wide product portfolio continues to strengthen customer preference and market positioning. JK Tornel continues to enjoy the highest market share in mass merchandise business.

EBITDA stood at ₹141 crores, and PBT grew by 63% to 61 crores, while PAT grew by 91% to ₹42 crores over the previous year. In the fourth quarter of FY26, revenue stood at ₹378 crores, with EBITDA of 24 crores, marking a 36% year-on-year increase, highlighting improved operational efficiency.

We are developing a new passenger line tire tailored for both Mexican and US markets, which will strengthen our product portfolio and market reach. Additionally, we have identified a new growth opportunity in our trading business through potential sourcing from Southeast Asia, and we have already initiated concrete steps in this direction.

In line with our commitment to digital transformation, we are implementing a cloud-based, AI-enabled platform which will streamline processes, enhance automation, and significantly improve productivity and decision-making capabilities. Looking ahead, trade ties with the United States remain strong, and we are optimistic about a favorable extension of the USMCA agreement, which is due for review in July 2026.

With that, I would like to invite Mr. Sanjeev Aggarwal to take you through the financial performance of JK Tyre for the fourth quarter and full year of FY26.

Thank you.

Thank you, Dr. Bajoria.

Let me briefly share the key highlights for Quarter 4 and full year of financial year of 26. The first point is the company recorded a consolidated revenue of ₹4,233 crore in Quarter 4 of FY26, which is up by 12% on y-o-y basis, as against ₹3,780 crore in the corresponding quarter.

For the full year of FY26, the highest turnover was achieved on consolidated basis, and this is ₹16,384 crore, marking an increase of 11% over the last year. Consolidated EBITDA for Quarter 4 was recorded at 546 crore, as compared to ₹384 crore, an increase of 42% on y-o-y basis.

Similarly, for full year, the EBITDA stood at ₹2,089 crore, which is up by 25%. EBITDA margins in Q4 were recorded at 12.9% percent versus 10.2% in Q4 FY25, representing an expansion of 270 basis points.

For the full year, the EBITDA margin stood at 12.8%. Raw material cost in Q4 was up by 1.3% on sequential basis, however, for the full year, it remained benign on y-o-y basis.

Cash profit for Q4 FY26 surged by 69% and stood at ₹446 crore, as against ₹264 crore in the corresponding quarter. For the full year, the cash profit was ₹1,661 crore, which is up by 38%.

Profit before tax for the financial year was up by 46% and stood at ₹1,043 crore, as against ₹713 crore in FY25. Profit after tax for Q4 jumped 83% and stood at ₹188 crore, as against ₹102 crore in Q4 of last year.

For the full year, the profit after tax stood at 774 crore, which is up by 50%. Installed capacities were fully utilized across segments, and for the full year at India level, the utilization was recorded at above 90%.

In Q4, export volumes from India remained steady, despite geopolitical uncertainties, including the ongoing West Asia crisis. However, in FY26, exports volumes were up by 5% vis-à-vis last year.

JK Tornel Mexico contributed significantly to the consolidated financials of the company. Consolidated earnings per share in Q4 stood at ₹6.65 per share, as against ₹3.47 per share last year.

Return ratios, ROCE and ROE, continue to remain robust and stood at 16.8% and 14% respectively. Consolidated debt as on 31st of March '26 stood at ₹4,445 crore, vis-à-vis 4,081 crore as on 31st of March, up by 364 crore as the availed term loans for expansion projects under implementation.

Out of the total debt, working capital borrowings reduced from 2,378 crore to 1,808 crore, which is a significant reduction highlighting efficient working capital management. Further, I would like to bring to your attention that the cash balance of ₹711 crore, which was there as on 31st of March '26, has mostly been utilized for the expansion project, and the cash balance as on 31st of March '26 was ₹301 crore.

This reduction of the cash balance was for the projects and basically raised against the QIP funds, which we did in December 2023. The balance sheet of the company continues to remain healthy, with robust key financial ratios.

Leverage ratios, net debt to equity and net debt to EBITDA have improved compared to last year to 0.73x and 2.13x as on 31st of March '26. We have already circulated our earnings presentation, and which is available on our website as well as on the stock exchange website.

You can now please continue with your question and answer. Thank you.

Hello, sir. Congratulations for good set of numbers.

I want to understand the market mix for Q4 and category mix for Q4. Yeah.

In the market mix in terms of the replacement in the Q4, we are 63%, and in the OE 30%, and rest about 10% for the export.

Okay. In terms of category mix?

Truck and bus for Q4 consolidated around 56%, PLR is about 30%, and non-truck bias is about 13%, and four-wheeler two-three-wheeler is about four 4%.

This is basis of consolidated revenue?

Yes.

On standalone terms?

Standalone terms, truck and bus is at 60%, and PLR is at 25%, and non-truck bias is about 12%. Two-three-wheeler would be about five 5%.

Thank you so much, sir. On standalone basis, our replacement share is 53%?

61,

61%, yeah.

OE is 30?

Yes.

Thank you so much, sir.

Hi, sir. Thank you for taking my question.

Couple of questions. First

Am I audible now?

I wanted to check about the Mexico business. If I see the quarter-on-quarter, there was a significant decline in the EBITDA number.

Just want to understand what is the driving factor? Because EBITDA, you said in the opening remarks that it was going good.

Was there any impairment or anything that led to a decline in EBITDA? If you can comment about Mexico.

Yeah. Mexico did witnessed a little sluggish growth.

This was due to the heightened geopolitical volatility and trade uncertainty which was owing to the US tariffs which remained. However, the revenue FY26 remained steady and stood at ₹2,138 crores versus ₹2,147 crores in FY25.

Okay. Second, sir, for the domestic India business, was there any price increase taken in the fourth quarter, or it mainly came only from the April onwards, the 4% to 6% hike?

We have already taken a price hike of about 4% to 5% across the segment in the replacement market and 5% to 7% in the export market. OEM, price increase comes at a lag effect.

Further we have planned another 5% to 6% price increase.

All of this came in

fourth quarter, or

all of this came in the first quarter, or was part of it also in the fourth quarter as well? Four

mainly in the first quarter.

Okay. Sir, about the capex plan, what is your expectation for the next two years?

Because this 50 billion capex this will be including the 11.3 billion capex already announced in Q3. Also if you can give a guidance about FY27 capex guidance, and how you plan to fund it, or will it be totally debt funded, or how do you plan to do?

I can guide you overall. See, we had declared last quarter ₹1,130 crore of expansion plans for TBR mainly and the PCR.

This was done because we are running almost at full capacity utilization, as we mentioned earlier. Now we have also taken up seeing the momentum in the demand growth, we have announced for another $50 million of 50 billion rupees of the expansion plan to be completed in three phases over the next three to four years.

The total expansion of ₹6,000 crore will be completed by 2029, financial year '29. The total outlay, cash outlay on a yearly basis would be roughly around 1,200 crore rupees.

Therefore, this will not make any dent on the cash availability with the company, which is going to be much more stronger. In any case, we are also going to take debt which you just mentioned, but this debt is also being supported by higher amount of the EBITDA which we are expecting to generate over the next three to four years.

The leverage situation in the company will remain quite comfortable, and also the leverage ratios will remain as what we have seen in the last two, three years' time.

Okay. Just this last one if I may.

Just wanted to check on the other income. That it was slightly down.

Hari, can you speak slightly louder?

Just wanted to check on the other income. Other income was down for the fourth quarter, just want to understand any

This is down because we had, as I mentioned earlier, ₹700 crore in our kitty earlier, which were invested, and this fund we had raised from QIP in December '23, which were marked only for the purpose of expansion. We have invested that fund, and we have withdrawn that fund from the fixed deposits, and we have used that fund for the purpose for which it was raised.

That is the reason why this is not showing this year as much as, let's say, the interest income, as it was last year.

Okay. Thank you, sir.

I'll fall back in the queue.

Thank you.

Hello, sir. Very good evening to the team.

Just Sorry to interrupt, sir.

Is this better? Does this help?

Good evening, everybody. Congratulations on a good set of performance.

Sir, just first question from my side would be on the demand front. If you could shed some color on how the demand is trending in the underlying markets across CVs, PVs, what are you hearing from the fleet operators, how is the order book coming through for the OEMs.

That would be the first question. Yeah.

The demand in the tire industry growth is expected to remain buoyant for FY27 on the back of healthy demand in the replacement and OE market. We have not seen any order books getting cut from any of the OEM, whether be CV, passenger, or any other line.

On the account of geopolitical uncertainty, there is been a little bit of uncertainty in the market. Some supply chains have disrupted, but, however, the underlying structural demand remains intact, and we continue to be optimistic about FY27 in that fashion.

Though the auto industry's had a double-digit growth overall, in FY27, we see a strong and a mid-single digit in some categories coming in for FY27. I think more or less, it's going to be in a good momentum.

Thank you, sir. The second question would be on the capex.

As you mentioned, about 1,200 crores of outlay every year. This 5,000 crores essentially also involves the 1,130 crores that we had already announced and would be underway at the moment, right?

This is in addition to that.

This is an addition. Then that you go overall almost 6,000 crores.

That 1,130 crores gets completed this year?

No, 1,130 crore will get completed by Quarter 3 or FY28.

Okay. This 5,000 This,

we have started working on it.

Understood. Got it, sir.

Sir, lastly on, like you mentioned, on commodities, we do see some pressure. How are we looking at in terms of, say, Q1, Q2?

Just to give some context, I think a peer had highlighted that there could be some demand moderation because of the price hikes that are being taken. If you could share your thoughts on the same in Q2 or H2?

No, on the raw material prices, we are seeing increase. In Q1 alone, we are seeing nearly about 18% to 19% price increase.

Going forward, actually, that will all be depending on the war. We are seeing some softening to an extent of the crude oil prices.

This may have a positive impact on bringing down the raw material prices as we go forward from Q2 beyond Q2 onwards.

Thank you. Thank you, sir.

That's all from my side.

Good evening, sir. Sir, just wanted to understand the pricing action.

You mentioned about close to 5% price hike we have taken in the domestic market. How the overall industry has responded?

Have the other players also taken sort of similar price hike? Any thoughts on the competitive scenario on the ground?

Sure. The competition also has in tune with the price hike.

I would say they are also in the same range as what we have said.

Understood. We have seen one or two large players looking to enter the tire industry.

One of the off-highway player has announced big plans over the next few years with respect to TBR, PCR, and two-wheeler. How do we defend our competitive positioning over the next three to five years?

Can you share some thoughts over here?

Look, in the commercial tires in the CV, we are serving the largest OEM players in India, and we are a very strong share of business with them, plus we are commanding a lot of premium positioning and innovative products which we have given to the market. To the aftermarket, we are also quite entrenched all India.

We are very successfully having a fleet management program, and within that, selling miles, which is the mobility solution business, that is a star product and offering to the consumer. There we have definitely created a lot of strong boundaries and walls for other players to duplicate that.

We are actually accelerating that offering in the market with lots of digital interventions. I think this is the piece of the CV.

In the passenger car, we are also entrenched and serving the large OEM, and there to meet their norms is quite stringent. You have to invest in technology across the products, actually, to sort of come to their norms.

There we have also given the market a lot of innovative products like Puncture Guard, then Smart tyres, and even our premium offering in Levitas. We are well entrenched in the domestic market.

We are continuously investing in our brand as well. I guess these are some of the areas in which we are definitely having a leadership position.

Understood. Just lastly, our expansion plan for the next five years, as you highlighted yesterday, has been largely centered around TBR and PCR, which is obviously our core areas.

Any thoughts on the two-wheeler space or on the off-highway space? Do we have any major plans to ramp up that part of the business?

Sure. We are growing steadily in the two-three-wheeler space.

We are right now increasing our productivity in our given space, and also we are outsourcing tires in the two-three-wheeler, and we intend to increase our outsourcing to increase our presence for two-three-wheeler in the coming quarters.

Understood, sir. Thank you so much.

I'll come back in the question queue.

Thank you.

Thank you for the follow-up. Just want to clarify.

You mentioned cash outlay for this year will be around 1,200 crores, but the capex plan for next three years comes out to be around 6,000 crores. Just want to understand how do you plan to do this?

Will it be 2,000 You please complete your question, yeah.

That's it,

though. So ₹1,200 crore I mentioned for the financial year '27.

Of course, if there is a requirement to spend more, that is definitely possible, as you can very well see the kind of cash generation which we have today. Even in 20 in FY26, we had cash generation of more than ₹1,600 crore.

Right? Seeing all that, we expect that this cash generation over the years will increase further.

The total amount of outlay includes also the loans which we will take. The total amount of ₹6,000 crore of projects will have the debt to equity for the second project which we have announced yesterday of about 2:1.

Right? We have to take the funds from the bank and also including our internal accruals.

The total amount of the cash outlay of about ₹6,000 crore is definitely possible in next three to four years' time.

Okay. Thank you, sir.

Thank you.

Thank you. I think we have been able to resolve and address all your queries, and this has been a very good interaction as usual.

I would like to thank you once again for all these questions, and you can get back to us in case of any further clarification required through the details which is already in the public domain. Thank you so much, and I would now close the call.

Thank you.