Thank you, Atharva. Good afternoon, everyone.

On behalf of Emkay Global Financial Services, I welcome you all to the 1Q FY27 earnings conference call of JK Tyre & Industries Limited. Today, from the management team, we have with us Mr.

Anshuman Singhania, Managing Director; Mr. Arun K.

Bajoria, Director and President, International; Mr. A.K.

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

I will now hand over the call to the management team for their opening remarks, post which we will open the floor for Q&A. Over to you, sir.

Yeah.

Thank you. Good evening, everyone, and I again welcome you all to JK Tyre Q1 FY27 earnings concall.

Let me start with the macroeconomic perspective. The Indian economy Q1 FY27 showed solid growth supported by strong domestic demand.

The industry showed resilience, but external uncertainty and higher input cost weighted on profitability. The real GDP is projected to grow at 6.6% in FY27.

The country's growth outlook continues to be supportive by robust domestic consumption, steady service activities, government focus on capex, and supportive monetary and fiscal conditions. The recent signed FTAs with several nations include EU, UK, etc., which augurs well to strengthen India's export and trade, which will help cushioning the impact of the macroeconomic volatility while simultaneously penetrating deeper into these markets.

In Q1 FY27, Indian auto industry poised another consecutive quarter of record performance across all sectors, registering high double-digit growth supported by sustained demand momentum across urban and rural markets on back of benefits of GST reforms, rising infrastructure activities, higher freight movement, new model launches, along with availability of ease in financing supported by lower interest rate. During the quarter, PV segment witnessed the leading growth of 23%, CV grew by 14%, 2/3-wheeler segment grew by 14% on a YoY basis, continuing with record performance in FY26, led by demand momentum.

Farm segment also performed very well with a robust growth of 22%, despite concerns of below-normal monsoon. Coming to JK Tyre, in Q1 FY27, we have witnessed a steady performance and recorded consolidated turnover of Rs 3,956 crore, supported by strong demand momentum across segments.

The performance is driven by focus on customer centricity, product excellence, and sharp execution across markets. During the quarter, domestic sales volume grew by 25% year-on-year basis across both replacement and OEM markets, with increasing contribution from higher value-added products.

The continuing West Asia crisis led to a steep increase in raw material prices approximately by 20% vis-a-vis Quarter 4 FY26, which impacted our gross and operating margins. We are offsetting the same by taking selling price increase in a staggered manner, enriching our product mix, higher share of value-added products, operating leverages, and taking efficiency improvement measures.

We are hoping that the recent moderation in commodity and crude oil prices are expected to lower the input cost and improve profitability margins going forward. We are optimistic that the demand momentum in the automobile and tyres would remain intact in the medium term, supported by new launches, strong replacement market needs, and rapid infrastructure growth and rising vehicle park.

Rural markets continue to gain traction in line with urban markets, driven by rising income, improving infrastructure, and growing aspiration for quality products, which is translating into increased vehicle ownership and thereby accelerating the tyre demand. We are strategically expanding our rural distribution network to cater to this emerging demand.

At JK Tyre, our focus remains on sweating of assets fully, improving product mix, leveraging premiumization, and EV-oriented portfolios. This together with enhancing digital and manufacturing excellence by leveraging IoT, AI, and ML, and deepening our customer engagement to deliver reliable, relevant, and future-ready mobility solutions.

Our mobility business continues to register high double-digit growth, driven by connected and intelligent solutions. We are establishing pan-India ecosystem which is supported by a network of 100+ Truck Wheels and 700+ Pit Stops, enabling seamless and timely on-road service.

India's EV ecosystem is growing rapidly with customers moving from ICE to EV on back of surging fuel cost, improving cost of economies, and wider model availability. We have witnessed a double-digit growth in overall EV volumes over previous quarter.

We offer a full-stack solution for EV tyres and are well prepared to lead this emerging trend. It is my pleasure to bring to your attention that JK Tyre holds the international benchmark in raw water usage and energy consumption, and our aim is to grow responsibly, reducing resource consumption and strengthening long-term resilience.

I'm proud to share that our Vikrant and Chennai Tyre Plant have received an International Safety Award from the British Safety Council. CII has also recognized several of our plants for sustainability, environment, health, and safety practices.

Our Global Tech and Innovation Centre, RPS COE, has signed an MoU with National Institute of Engineering, Mysore, strengthening industry-academia collaboration. This partnership aims to drive innovation in tyre engineering through leveraging emerging technologies like AI and data-driven solutions.

Keeping our optimistic outlook on tyre demand, we stand committed to expand our manufacturing capabilities as already announced in the previous quarter for Rs 4,980 crore for PCR and TBR at Chennai Tyre Plant. Now I would like to take you through some of the key operational highlights for Q1.

Domestic markets recorded a healthy volume of 25%, led by a robust 42% growth in OEM. TBR volumes in OEM market grew by 18% and in the replacement market by 15% on a YoY basis.

Passenger line volume grew by 10% on a YoY basis, led by OEM. Farm category volume also saw significant growth of 31% YoY basis, contributed by 35% growth in OEM and 25% in replacement.

2/3-wheeler category volume in the OE segment registered a high double-digit growth of 70%, while replacement volume grew by 48% on a YoY basis. Now I would request Dr.

Bajoria ji to talk about the performance of Tornel.

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

Starting current year 2026, Mexico's macroeconomic position and domestic environment is witnessing an improvement as evident from the appreciation of Mexican peso against US dollar on a year-on-year basis, which signals a rebound in investors' confidence in the economy, its policy framework, and echoes greater external stability. As per Mexico's fiscal authorities, the economy is now better placed and is expected to achieve a GDP growth of more than 1.5%, outperforming the IMF's latest projection of 1.2% for 2026.

Talking about the Mexico tyre market, it is poised for a balanced growth with momentum in OE market, a resilient replacement market, and higher export potential with focus on local sourcing. During the quarter, operations at JK Tornel, Mexico were impacted due to ongoing geopolitical disruptions resulting in constrained availability of key inputs.

Furthermore, productivity enhancement negotiations with workers resulted in IR issues which have since been resolved. We would like to assure you that dedicated efforts are underway to continuously enhance sales and profitability going ahead.

To cater to the emerging demand for our products, we are currently undertaking an upgradation and modernization project at JK Tornel, which will help in further strengthening of our competitive position in local and other markets as well. With that, I would now like to invite Mr.

Sanjeev Aggarwal, the CFO, to take you through the financial performance of JK Tyre for the first quarter of FY27. Thank you.

Thank you very much, Dr. Bajoria.

Let me briefly share the key highlights for Q1 of FY27. Number one, the company recorded a consolidated revenue of Rs 3,956 crore, which is up by 2% on YoY basis as against Rs 3,891 crore in the corresponding quarter.

Consolidated EBITDA for quarter one was recorded at Rs 268 crore as compared to Rs 424 crore in Q1 of last financial year. EBITDA margins on consolidated basis in quarter one were recorded at 6.8% versus 10.9% in Q1 of FY26.

Average raw material costs in Q1 was up by 20% on sequential basis. Cash profit for Q1 stood at Rs 169 crore vis-a-vis 309 crore in the corresponding quarter.

Profit after tax for the quarter stood at Rs 43 crore. Installed capacities in India were fully utilized across segments, including for TBR, PCR, two- and three-wheelers segments.

In quarter one, export volumes from India remained steady despite geopolitical uncertainties and were up by 2% on sequential basis over quarter four of last financial year. Consolidated earnings per share in quarter one stood at Rs 1.55 per share, which was high at 6.03% 03 per share in quarter one of last year.

Return ratios continues to remain robust and healthy. Consolidated net debt as on 30th of June 2026 stood at Rs 4,945 crore, which is up by 500 crore on sequential basis.

The overall debt of the company has moved primarily on account of increase in capex-led long-term loans disbursements and additional working capital required due to increase raw material and selling prices and the operating volumes of the company. The balance sheet of the company continues to remain healthy, and leverage ratios are in comfortable zone.

Net debt to equity and net debt to EBITDA remains 0.81x and 2.56x as on 30th of June 2026. We have already circulated our earnings presentation, which is available on our website as well as on stock exchange website, and we open the forum for question and answer.

Thank you.

Hi. Thank you for taking my questions.

Sir, a couple of questions. First on this India business.

Can you help us understand what was the volume growth for the quarter one? Because when you say 25% growth in volume, just want to understand whether you're referring it to broader industry growth or is it growth for us?

Because our revenue growth was around 14% for India business. Just want to collate both volume growth and revenue growth for India business.

Yeah.

Our domestic volume growth was 25% year-on-year basis from the corresponding quarter. The volume growth in numbers, which includes replacement and OE.

Domestic sales. Then

that implies that pricing was down YoY, because revenue growth in India business is 14%, right? Can you help us absorb this gap?

No, see,

there has been an increase in price, and the net effective price is coming to roughly around 5%, and this we are talking about only standalone basis, right?

Yes. The standalone basis.

On sequential basis from the previous quarter, the 5% increase in NSR is roughly around there.

Just to add to that, the OEM growth was in volumes 42%, and in terms of price which they pass on is always a lag, it doesn't really sit on the first quarter. It will come in the subsequent quarters.

Okay. Sir, can you also help us about the Mexico business?

Because that has been quite a volatile in the Mexico business. Fourth quarter was also weak, and first quarter has also declined significantly on YoY basis.

Should we expect it to improve from here, or what is the expectation for FY27 regarding the Mexico business?

Yes, Mr. Vijay.

The thing is, as I said, that during this quarter, the operations were impacted due to the ongoing geopolitical disruptions, and resulting in constrained availability of key inputs, which also obviously affected the output. The productivity enhancement negotiations also came in the way this time, particularly this quarter.

Now everything is resolved, and we've again started getting the normal production. I can only assure you that this year, remaining three quarters, we will be definitely showing you better results than what you've seen in Q1.

Okay. Sir, in terms of Mexico business, the supply chain issue was related to can you provide specific which part it was, which component it was?

See, mainly we are getting the raw material from two sources. Because of the shipping disruptions and also because the container, as you would have known by now, the prices have absolutely shot through the roof.

All those things have affected us. We have been getting a lot of our bead wire from China, so that has also affected us.

The natural rubber prices, as you've just heard, it is a similar story in Mexico as well, where almost about 18% increase has already taken place. We are now getting back to the normalcy, because certain shipments which were delayed are now reaching one by one.

I can only tell you that, yes, this was a little softer quarter, but going forward from here, you will see a better production, better sales, and therefore better bottom line.

Okay. Is that because concern was that geopolitical issue between US and China will still continue.

War no war. Sir, how much price increase we have taken in the first quarter, and what is expected for the second quarter?

Yeah.

The first quarter, we took a price increase of nearly about 5%, and further we are going to be taking in the range of about 8% to 9%.

Some of this is already taken, or 8% to 9% or all of it will come in the later part? 5% was in Q1 only, right?

Till now we have already taken about 11%

cumulatively, and

further we have 5% to 6% going forward.

Okay. Acha.

Thank you.

Yeah. Hello, everybody.

My question was on the remaining three quarters of this year. Like somebody was saying that, we are expecting better sales, better volumes, and better pricing, better profits.

Could you help us understand, could you help us quantify what exactly are we aiming for this year, this financial year?

Are you talking about India domestic market, or you're talking about the Tornel? Because Tornel, we have, I think, very clearly explained.

Huh. Mr.

Bhagnani, if this is about India, then I can tell you, and Anshuman ji will agree, that because now the intensity of war and therefore this supply-side problems on account of the raw material have to a large extent been resolved, and we are hoping that these raw material prices, barring maybe some increase of between 8% to 10% as we have been noticing because of the inventory which is at a higher price we have accumulated actually even now, so that is there in the inventory. Otherwise, things are normalizing, and once these are stabilized, then we will be able to see a good margin improvement from at least second half of this financial year.

Right. We are expecting all the three quarters now onwards should be on a progressive basis improving in terms of margins.

Okay. Are you concerned at all about the natural rubber prices?

Natural rubber prices, we have seen in fact some softening which is happened, and so we see that probably going to be in that range-bound fashion. Okay.

You feel that once you take a price hike, it should be able to cover that, right? Yes, definitely, yes.

We are expecting that the price increase which we have already taken until date, plus what we are contemplating going forward, this should cover the entire increase in raw material prices, barring maybe, I'm not talking about maybe 1% or 2%, but that of course we are trying to offset through the cost reduction measures, higher operating leverages, and so many other things like, as Anshuman ji mentioned earlier about the product mix and higher premiumization. Those kind of measures will also improve the margins, and we should be able to come back to broadly the normal range of 11% to 13% in the second half.

Okay.

What kind of revenue growth Sanjeev ji, are we expecting this year on an overall basis? Because I think there's some new capacity which has come online as well, right?

Or is supposed to.

This is already there, and somewhat still some ramp-up is happening in the case of passenger car radial tyres. We are expecting that everything will get, let's say, up and steam running.

By third quarter of this financial year hopefully. We are expecting more than double-digit growth in the revenue, because of the price increase and the volume increase, everything put together should give us good double-digit growth.

Similar to what we did in till March '26, about somewhere about 10%, 11%, 10%, 11%?

That's right.

Okay. What should be the guidance for I know you don't provide much guidance, but just trying to understand, since the first quarter was a little bit on the lower side in terms of the operating margin, what can we expect for the whole year?

For the whole year, this will all be dependent on the raw material prices, of course, but we are trying to, let's say, maximizing it. Yes, may not be to the extent of what we have seen in the last financial year because of the first quarter, but yes, in the range of maybe about 10% to 11% or something like that, if I have to make a guess.

Got it. Sir, final question on the balance sheet.

Are we planning to increase any debt this year?

There will be somewhat increase in the debt because we are implementing projects, and the funds which we had earlier in cash, that have already been utilized. We are now generating internal accrual, that is funding the projects.

Also somewhat loans we will have to take in a progressive manner again. To that extent, but again we are repaying also a large amount of debt every year.

It will not be a big jump, but yes, because of certain operational requirements, the working capital increase has happened because of higher raw material and selling prices. To that extent, I think some increase will be happening and some capex-led kind of disbursements.

Broadly, I am expecting that Rs 500 to Rs 700 crore overall in this financial year increase should be there.

Okay. Got it.

This will provide a lot of the EBITDA going forward in absolute terms, so that will help in growing the business.

Okay.

Thank you

so much. Thank you.

Thank you.

Hi, everyone. Sir, could you please point out what is the capacity utilization across your TBR, passenger line radial, 2/3-wheelers, and in the Mexico business, please?

Our utilization has been, around 95% in the JK Tyre standalone, and consolidated around about 80%. We have been able to utilize nearly full capacity utilization for truck radial tyres and 95% of passenger car, and 2/3-wheeler was also nearly full utilization.

Non-truck bias, which LCVs and farm and that has been also a very sharp utilization towards 95-plus.

Okay. Could you please also explain like you had mentioned earlier that 3Q you will have some capacities coming up.

How much volume would that add overall to this financial year?

Sorry, I didn't get you. Can you be please louder?

Okay. Can you hear me now, sir?

Hello?

Yes, please go on.

Like you had mentioned earlier, you'll have some capacities coming online by third quarter of this financial year. I wanted to understand how much is going to be added in each of these categories.

In this

with our plans of going upward towards Rs 4,980 crore, which will entail passenger and truck radial, we will be adding 24%.

Yes, sir, but that 24% is over the next 4 years. I was specifically looking for what is being added this financial year and maybe even the next financial year.

Next financial year addition will be majorly for the truck and bus radial tyres and also for passenger car balancing of various capacities at Banmore Tyre Plant we are adding. This will increase roughly around 7% of the total capacity the company has today.

Okay. Sure, sir.

A final question on the EV tyres. Just generally across the industry, is it true that EV tyres have a smaller replacement cycle?

If you could explain why.

Yeah. EV tyres are prone to heavy load, the tyre is demanded to have better rolling resistance.

Actually the torque is very high, the wear and tear is high. It is worn out faster than a normal ICE tyre.

Sir. Comparable ICE tyre, how much in percentage terms is the life shorter for EV tyres?

Because of high torque,

5%

to 10% 5% to 10% difference in the life of these tyres is there compared to ICE tyre. That also depends how the user is.

Okay.

Okay. Sure, sir.

That's all from my side. Thank you for answering my questions, and all the best for the future.

Thank you.

Thank you.

Good afternoon, sir. I want to understand on two fronts.

Despite West Asia war and rising tyre prices, there was still strong demand for tyre industry during Q1 FY27. What was Q1 FY27 volume growth on standalone basis?

Second is, what is our BU mix on standalone basis basis volumes?

Our standalone basis, the growth in volumes were 25% in the domestic. We see going forward that demand is very optimistic, that we see a strong demand in rural and urban to come in.

We are seeing a double-digit growth coming in for ourselves.

Sir, sequential quarter basis, 25% is YoY, and sequential?

Sequential would be roughly in terms of a mid-single digit.

Okay. Okay.

Our market mix?

Sorry?

Our market mix?

Market mix has been improving, particularly in the PCR segment, as we have mentioned earlier also. This is better now.

It's for 16-inch and above, we are roughly around 35% today, only for the PCR. If you talk about the product-wise, the mix is like truck and bus is 53%, sorry, 56%, and passenger line radial is 27%, 2-wheeler, 3-wheeler is 5%, and others means industrial, farm, and others put together is 12%.

Okay. Thank you.

Thank you.

Thank you for allowing a follow-up. Sir, want to understand in terms of the pricing hike, you said we have taken around 5% price hike in quarter one.

Just want to understand how much of it has flown in the quarter one, and when was the price hike taken particularly in Q1? Was it in early start of the year or towards the end of the quarter?

Actually, this is on a monthly basis we have been taking small hikes every month. This is not at the beginning or at the end of the quarter, this is on a monthly basis we have been taking price hikes as is actually generally balanced with the quantity offtake, so that it does not destroy the applecart, and this has been easily absorbed.

We are very cautious about how much price hike we can take every month. This is generally the kind of the terminology used is inching up the price

hike,

which does not pinch the customer as well.

Okay. Okay.

Sir. I'll fall back in the queue.

Yeah. Hello.

Can you hear me?

Yes,

Thanks for the conference call. I just have one easy question, quick question.

Do you see rubber prices, natural rubber prices, RSS4 prices in India trending downwards from after the monsoons? Do you think rubber prices will be closer to Rs 230 per kg in the case of RSS4 by the end of the year?

We are already seeing rubber prices to soften in India. This will fall down next quarter.

There is some softening happening.

Okay. Superb.

I guess that would result in an increase in margins as well for us going ahead.

Yes. Yes.

Yes.

Oh, superb. Superb.

Thank you, management.

Hi. Thank you for taking my question.

I just wanted some more clarity on your Mexico business. Our Mexico business has reported a decline of almost 82%.

In some of the articles I read, there were some strikes in the Mexico plant. Just wanted to understand that going forward, has the production normalized, and would we see the same revenue which we clocked in Q3 or Q4, or it will take time to get the production normalized?

Thank you. I want to make a small correction, that it was not a strike, it was a slowdown.

Secondly, as far as going forward, the same kind of production has already started, and we are now back with a bang. Of course, it may take a little more few days, but then at the end of the year, we are hoping that we will be able to turn out more or less similar top line, and then let's see how much we can because the passing on of the prices in Mexico is little more difficult than it is in India.

We are completely at it, and we hope to give you better results.

Thank you. Just a follow-up.

Any update on the USMCA? What is the update or the status of it?

Yes, the USMCA agreement has been renewed for 10 years, and therefore we are hoping that the relations between Mexico and USA in terms of the duty structure is going to be favorable towards Mexico, unlike some of the agreements that USA has had with other countries.

Okay. Thank you.

That's helpful.

Thank you so much for joining us for this quarter one conference call. Hope we have answered your questions to your satisfaction.

If you have any other further questions, you can write it back to me, and we will be happy to answer that. Thank you so much for joining.

Thank you.