Thank you, Rudra. Good evening, everyone.

On behalf of ICICI Securities Limited, I would like to welcome you all to Q3 FY26 earnings conference call of JK Tyre & Industries Limited. Today, we have with us the senior management team represented by Mr.

Anshuman Singhania, Managing Director; Mr. Arun Bajoria, Director and President International Business; Mr.

Sanjeev Aggarwal, Chief Financial Officer; and Mr. A.K.

Kinra, Financial Advisor. We will begin the call with the opening comments from the management team, followed by Q&A session.

Over to you management team. Thank you.

Thank you and a very good evening to all of you. I welcome you all to the JK Tyre quarter 3 FY26 earning call.

First, I would like to extend my heartfelt and warm wishes to you and your family for a very Happy New Year. I am glad that here I have with me Dr.

Arun K. Bajoria ji, Director and President International; Mr.

A.K. Kinra ji, Financial Advisor; and Mr.

Sanjeev Aggarwal ji, the CFO. The Union Budget 2026 reinforces India's commitment to the manufacturing-led growth.

The continued drive on capital expenditure with infrastructure allocation exceeding ₹11 lakh crores will improve cost efficiency and support demand momentum in the auto and tyre sector. The Indian economy picked up pace in the second quarter of FY26 as is exceeded the expectation by achieving GDP growth of 8.2%, signaling a clear and a broad-based uptick in the economic activity.

This expansion also marks the highest growth in the last six quarters on back of strong rebound in the domestic consumption, resilient rural demand, higher government capex coupled with GST reforms, and strong festival demand. Recent trade deals with EU and USA have been announced, which will integrate the markets with above FTA countries and provide India benefit of market diversification.

Indian auto industry continues to ride the wave of strong momentum with pent-up demand. The year FY26 will be marked as a year of historic performance for the Indian automotive industry, as robust growth is being witnessed across sectors.

In FY26, CV sales are expected to exceed its previous record high of over 1 million units, which was achieved in FY19, driven by infrastructure development, increased freight movement, GST reforms, and lower interest rates. PV have also recorded the highest ever sales of 4.38 million.

While SUVs continue to dominate the PV sales, small cars also rebounded strongly. Two-wheeler sales also surpassed the 2 20 million mark.

In quarter 3 FY26, auto industry witnessed a record-breaking performance in both domestic and export market across segments with high double-digit growth. As we enter quarter 4, the momentum looks strong backed by firm demand across segments, along with fresh pipeline of new launches and an overall improvement in customer sentiment.

Talking about JK Tyre Q3 financials, we have recorded the highest ever revenue of ₹4,235 crores at a consolidated level, up by 15% on a year-on-year basis. EBITDA stood at 583 crores with a margin of 13.8%, reflecting a strong year-on-year expansion of 470 basis points.

This growth was driven by JK Tyre's continued focus on product premiumization, operating leverage, along with execution excellence. Benign raw material prices also contributed favorably.

Profit after tax surged 3.7 times to ₹209 crores. In quarter 4, raw material price scenario is expected to remain range-bound, 1% to 2% increase.

JK Tyre has introduced embedded smart tyres for passenger cars to deliver real-time data on tyre operating conditions. The launch of embedded smart tyres marks a defining milestone in JK Tyre's innovation journey while supporting a safe driving along with improving vehicle's performance and efficiency.

Electrification continues to be steady and gaining momentum on a continuous basis. I'm proud to announce that JK Tyre has secured new OEMs approval for supplying EV tyres to Hyundai Creta, Tata Punch for electric variants.

Recently, Renault Duster has also been launched with our Ranger HPE tyre, demonstrating a long-standing faith of customers in our offerings. Also, four new types of OTR tyres have been launched for industrial and mining applications.

These tyres are capable of sustaining harsh environments while continuing to deliver superior durability, sustainability, and traction. During the quarter under review, we have further expanded our market footprint by adding nearly 200 dealer pan-India in order to serve the growing domestic demand, and 35 pit stops for enhancing customer services.

Further, 25-plus new fleets have been added to the total count. In order to cater to the rural demand, rural distribution network is being expanded.

Indian tyre industry is witnessing a strong demand across segments. In order to capitalize on the significant market opportunity, the company has decided to further expand capacity for TBR, ESLTR, and PCR through our expansions in various locations for an aggregated cost of 1,130 crores.

This will increase our overall capacity by nearly 7%. We are proud to share that JK Tyre has earned a prestigious silver rating in the latest EcoVadis ESG assessment, placing the company amongst the top 7% companies globally.

This recognition reflects our strong performance across all sustainability pillars and reinforces our unparalleled efforts towards the vision of becoming a green company by 2050. During the quarter, we completed the merger of our subsidiary company, Cavendish Industries Limited, with JK Tyre after securing all statutory approvals.

CIL has undergone a remarkable transformation under the JK Tyre leadership. JK Tyre provided all the necessary technical, financial, and managerial support, and capacity utilization was scaled up from around [coughs] 30% to over 95%, marking it JK Tyre yet another successful turnaround acquisition after Vikrant Tyres and JK Tornel, Mexico.

I would like to bring to your attention that this merger is going to be highly value enhancer and will bring a lot of operational and functional synergies through pooling of resources. We are delighted to announce our long-standing association with the prestigious and highly coveted awards, ICOTY and IMOTY.

There are some few operational highlights. Domestic markets recorded a healthy volume growth of 16% contributed by replacement segment by 11%, OE segment by 24% on year-on-year basis.

Exports demonstrated resilience and grew by 9% in volume terms despite geopolitical uncertainty. TBR volume in the replacement market grew by 15%, and in the OEM market by 33% on year-on-year basis.

Passenger line volume grew by 18% on year-on-year basis, contributed by replacement market growth by 11% and a strong OEM growth of 24%, and export volume grew by 40% on a year-on-year basis. Farm category volume on a year-on-year basis also saw significant growth, majorly contributing by the OEM and replacement market.

Two-three-wheeler segment volume on the OEM segment also grew by 30 30% on a Y-o-Y basis. Now I would like to request Bajoria ji to take over the performance on our JK Tornel.

Thank you, MD sir. Mexico's economic growth in 2025 remained steady despite heightened uncertainty over US tariffs and persistent macroeconomic headwinds.

Further, as per the International Monetary Fund's World Economic Outlook, WEO, report, GDP growth for the full year 2026 is now projected at 1.5% supported by gradual monetary easing. The Bank of Mexico has further cut the benchmark interest rate, TIIE, to 7%, its lowest level since 2022, driven by continued remittances from the US into Mexico.

These rate cuts are aimed at stimulating economic growth amid sluggish GDP performance and ongoing uncertainty related to US tariffs. Coming to JK Tornel's performance in Q3 FY26, revenues were recorded at ₹616 crores as against ₹507 crores in the corresponding quarter, reflecting a robust 21% year-on-year growth, thereby reaffirming the continued customer preference enjoyed by JK Tornel in Mexico.

We are proud to share that we have achieved the highest ever sales in Q3, reaffirming JK Tornel's strong market position. In addition, we have once again recorded the highest ever sales to mass merchandisers.

JK Tornel's EBITDA for Q3 stood at ₹58 crores, up by 45% on a year-on-year basis as against ₹40 crores in Q3 FY25. EBITDA margins reached a level of 9.4%, registering an improvement of 148 basis points over the corresponding quarter, led by the product mix improvement and benign raw material prices.

PAT stood at ₹42 crores, significantly higher than the corresponding quarter. We would like to assure you that dedicated efforts are underway to continuously enhance sales and profitability even as we remain cautiously optimistic for the year 2026.

We continue to closely monitor the upcoming revision of the United States-Mexico-Canada Agreement, USMCA, in July 2026 as this will be important for sustaining and strengthening our business with the USA. Now I would request Mr.

Sanjeev Aggarwal ji to talk about the financial performance of JK Tyre for the third quarter of FY26. [clears throat]

Thank you, sir. Thank you very much.

Let me briefly share the key financial highlights for Q3 FY26. Number one, the company recorded its highest ever consolidated revenue of ₹4,235 crore, up by 15% on Y-o-Y basis, as against ₹3,694 crore in corresponding quarter.

EBITDA for Q3 FY26 was recorded at ₹583 crore [clears throat] as compared to ₹335 crore in the corresponding quarter last year, an increase of 74% on Y-o-Y basis. EBITDA margin during the quarter were recorded at 13.8% vis-a-vis 9.1%, representing an expansion of 470 basis points.

Cash profit for the quarter more than doubled and stood at ₹478 crore as against [unclear] in the corresponding quarter last year.

Okay. [clears throat] Profit after tax for Q3 jumped by 3.7x and stood at ₹209 crore as against ₹57 crore in Q3 FY25.

Government of India on 21st of November '25 notified four new labor codes, consolidating the earlier 29 labor laws, and has comprehensively defined the term wages. Accordingly, there is a incremental financial implication of this labor codes to the extent of ₹56.75 crore towards retiral obligation, which has been taken into account and has been shown as the exceptional items in the P&L account.

Radial tyre capacity utilization remained high beyond 95%, and overall Indian operating capacity utilization touching 90%. Capacity utilization at consolidated level remained over 85%.

In Q3, export volumes from India remained steady despite the uncertainties and have grown by 9% in terms of volume on Y-o-Y basis. As informed earlier, our subsidiary company, CIL, has been merged into JK Tyre in December 2025 with effect from the appointed date of 1st of April 2025.

Subsidiary JK Tornel, Mexico witnessed a significant improvement in its financial performance and has added to the consolidated financials. EPS in Q3 jumped 4x to ₹7.29 per share as against ₹1.85 in the corresponding quarter.

Return ratios, ROCE and ROE, have been very stable and been in the comfortable zone in the middle double-digit level. Net debt as on 31st December stood at ₹4,183 crore as compared to ₹4,200 crore as on September 30th, 2025.

Fresh disbursements were taken for expansions, which increased the total term loans. On the other hand, some working capital loans of CIL were repaid to avail working capital in JK Tyre at better interest rates post merger.

The balance sheet of the company continues to remain healthy and robust with key financial ratios, leverage ratios with 0.71 debt to equity and 2.17x debt to EBITDA, respectively. We have already circulated the Q3 earnings presentation, which is available on our website, and you can please refer to that.

Now we open the forum for questions and answers. Thank you.

Hello. I want to understand what is the capacity utilization you're operating at, and also if you can give some color on the volume growth and pricing growth in the revenue mix this quarter?

The capacity utilization has been at a level of 90 90-plus percent. Our, what do you call, the other question which you were asking was the pricing?

I'm asking the revenue mix for the volume growth and pricing growth.

The revenue growth has been in the replacement market, it is 56%, and OE is 23%, and

No. Yeah.

Anshuman ji, I'm basically asking the growth that we have achieved, 15% quarter-over-quarter, within this, how much have we got in terms of volume growth, and how much have we got in terms of pricing growth by taking a price hike?

Majorly, this is because of the volume growth, because this is almost with a slight difference where we have increased some pricing in certain SKUs. Majorly, it is because of the volume.

Domestic volume growth has been 16%, and our replacement volume growth has been 11%, and OE has been 24%.

There is not much of pricing growth. In export, grew by 9%.

Right, there's not much of pricing growth, right? You're not taking any price hikes?

No. Very very very minor everywhere.

Right. Given the given the raw material scenario we are at currently, where do you see margins for this year and the next quarter, next couple of quarters?

Raw material will be range-bound, as I said, and it will be 1% to 2% going up, we are expecting. The margins are going to be quite intact, because there is a lot of volume push in this, and plus our premiumization will also play a role in the margin, and plus the higher capacity utilization will also play a role in that.

Right, right. Sir, final question.

One of our competitors like CEAT, they almost reported a 25% growth on a similar base, because the other companies have a higher base than us, and we reported around 15%. Is the management targeting a higher revenue growth going forward?

We are targeting a double-digit revenue growth. Since you mentioned about the competition, particularly CEAT, please don't forget that they have a larger base of two-three-wheeler as well.

Also, that acquisition.

They acquired one company, and the revenue from that company which they acquired in Camso, so that has added to their revenue.

Okay. Are we targeting in terms of this mid double-digit, high double-digit, low double-digit in terms of revenue growth?

It's a mid double-digit, as we have seen in this quarter, if the momentum continues, which is more likely, then we are expecting mid double-digit growth.

Okay. Thank you.

Thanks so much, and all the best.

Hi. Congratulation for good set of number.

I want to understand the revenue mix on standalone basis in terms of category and BU as well as what was the percentage drop in the raw material cost on quarter-on-quarter?

The quarter-on-quarter, the raw material, quarter 2 to quarter 3, it was flat-ish. It was flat-ish.

Here the other question which you were asking was the growth, right? The growth

Revenue mix on standalone basis.

Revenue mix. Truck-bus is 58%, and passenger car line is 27%, and non-truck bias is 11%.

Okay. And 11% includes 2-3-wheeler?

No, 2-3-wheeler is separate, which is 4%.

Okay. In terms of BU?

In terms of BU, I didn't understand BU.

Or replacement, OE Market-wise.

Yeah. In terms of market-wise, replacement is 63%, OE is 26%, and 11% is export.

Okay. Thank you, sir.

Thank you.

Thank you. Thanks for the opportunity and congratulations on good performance.

My first question is on your Mexico business. What was the average realization in rupee in terms of rupee versus Mexican peso for this quarter?

Now that rupee versus Mexican peso has moved over ₹5 in last two, three months, which is, I think, positive for the company. Just wanted to understand on that benefit because of this.

As you can see, it is flat, about flat-ish, the revenue per kilo, or whatever you want to see it as. The net revenue has gone up by 21% year-on-year basis.

As I mentioned, that from 507, it has gone up to 639 crores rupees.

In constant currency, Mr. Bajoria mentioned that these revenues have been flat-ish.

Understood. The entire benefit is from the depreciation or I would say the rupee depreciation, correct?

The impact of the rupee is 21%, and the net revenues in terms of rupee has gone up by 21%.

Year-on-year

basis. On Y-o-Y.

Understood. Sir.

My second question is on the demand scenario. Now that GST benefit has already come through in the replacement segment, do you see that continuing even post the fourth quarter, because most of the companies are guiding for double-digit growth for the fourth quarter, but do you see this demand sustaining in the replacement market even beyond the March quarter?

We are seeing that entering the quarter 4 is going to be very strong, and we are very confident about the healthy growth which is going to be coming across the sector. Not only GST is definitely boosted, but we are seeing the macro tailwinds which are very positive in terms of rural demand, in terms of positive consumer sentiment, and moreover, lowering of that interest rate also is a very positive momentum, and we see that continuing that into FY27.

Understood. Okay.

One last question from my side. Sir, you, along with some of your peers across the industry, have announced new capex, and the size of the capex is large for everyone.

Do you see a scenario, and most of the companies have been reporting almost 90% utilization level like you. Do you see a scenario that in the near term, say for next 12 months, there could be a scenario where there is capacity constraint and the industry is looking to take price hike just because there is no capacity available?

Pricing-wise, I think the scenario is favorable for the industry?

Look, everybody is announcing at their different capacity levels capacity growth, right? As I told you that domestic market is looking to be very buoyant in the coming year, the appetite of commercial vehicles have come back after a long pause, this will continue.

Plus, please don't forget that domestic is one consumption point, the other is the export market at large, which is a bigger also consumption point for tyres. Right now, as you know that the EU and the US FTAs are almost at the fine prints of getting finalized, we are expecting that tyres should be given that importance, and we will benefit from that for export.

The capacities will be needed as we go forward because of the robust demand overall.

No, sir. My question was more from the pricing point of view.

Given that the demand in market is pretty strong and the capacity is almost near peak utilization level, in case of a higher raw material pricing scenario, do you think that the price hikes could be much more easier this time, given that recently because of GST also there was a price cut and industry also doesn't have adequate capacity? Pricing-wise, do you think that it'll be easier for you as well as other industry players to take price hikes in the near term?

See, in terms of the demand-supply situation and the overall market dynamics, whatever necessary price revisions maybe have to be undertaken going ahead, that's a call every individual company will have to take.

Understood. Thank you, sir.

Thank you.

Thanks for opportunity, and congrats for strong set of numbers, sir. Sir, my first question on that demand scenario on that Mexican business.

Just wanted to understand how much the volume growth Y-o-Y and Q-o-Q in Mexico, and what are the levers for the business growth over there?

No, so as Bajoria ji was also responding to the question earlier, the Mexico has seen a year-on-year basis a demand of 21% jump of revenue from Y-o-Y basis. As we go along, that we see a good traction coming in from Mexico itself, because the economy is picking up there.

The other thing is also that we are continuously exploring the US-Mexico under the USMCA. Right now, it is not announced anything, the duties, but we are taking advantage of that and we are exporting into US.

Plus, we see that Brazil and LATAM is also at a steady demand. There we are also finding newer spaces to increase our throughput in terms of volumes.

As I told you that we are constantly increasing our foothold in Mexico appointing dealers and higher volume through mass merchandise as well. We are seeing a good throughput coming in from there.

In Mexican business, how much is the contribution of the export right now?

From the Mexican, it is about 40%. Correct.

40%. 60% is the domestic.

Yes.

Sir, in a domestic market, there also that Mexican government has imposed duties on the many countries. Just wanted to understand what is the benefit to you, because your plant is over there.

Is there any benefit goes to you because of this?

As the benefit is because we are a local producer there in that, we get the benefit of a low-cost base, and that's why we've been able to supply tyres into the market and export, we get that benefit.

From here on, what kind of the growth you are looking in the domestic and Mexican market and export market in Mexican business in the next one year, sir?

We are looking at mid to high single-digit growth.

Absolutely. Single-digit growth?

High single-digit.

Got it. How much margin expansion you are looking over there?

We are looking in the range of about 1%

to 2%. Yeah.

1% to 2%. Got it, sir.

That's all from my side.

Thank you.

Yes, hello. Good afternoon to the team, and thank you for taking my question.

Can you be a little louder?

Is this better? Am I audible now?

Comparatively better, yes.

Yes, sir. Congratulations on a great set of numbers, sir.

I just had two questions. One is the 14 billion of capex that was undergoing, we had mentioned that it would come on stream from Q3, and I think PCR had started from October is what.

Just wanted to know the status on that currently, if that's the first question.

Our PCR is already under ramp-up, it is already going to be attaining its full capacity by July '26. Our TBR is by April '26, and ESLTR is already completed, achieved.

Thank you, sir. Sir, we had also called out EBITDA margin guidance of 13% to 15%.

I think we are already towards the upper band, and with Q4 RM basket seen going upwards of 1% to 2%, the impact of that would largely flow through in Q1 of '27. Do we still stand by the guidance of 13% to 15%?

Yes, we will, because as I was explaining in the earlier call, there is a lot of robustness in terms of the OE demand, and we are the largest in the truck and bus, there we are seeing good throughput coming in, and it is going to be sustained even in the FY27. We also see a good traction also in the passenger car line as well, where our premiumization is playing an important role in terms of margin expansion.

Last year in our mix in the 16-inch and above, we were 27% in the mix of passenger car, and today, we are at 31%, 32% in the mix, so that is also panning out for us. Just to complete the story, we are also expanding, as I mentioned, 1,130 crores, where we are also undertaking more expansion in the passenger lines, which will also enhance us for higher rim-size capability.

Thank you for such a detailed answer. Sir, just one last question if I could squeeze in.

We had spoken about a 50 billion capex over a period of next five years, this 1130 would essentially form a part of that plan, if I'm not wrong?

The 1130 is the part of that only.

Okay. Sir.

Got it.

This will be sort of phasing out

Over a period of three to

four years, yes.

This 1130 would be over a period of three to four years?

No, no, these are

No, 50 billion will be over

three to four years. This will take one or two years' time, rather one and a half years exactly, to complete the project.

Got it, sir. Thank you so much.

Thank you for taking my questions.

Am I audible?

Yes.

Congratulations, sir, for a good set of numbers. I have just two questions from my end.

First one is what kind of demand traction we are witnessing in the verticals? Is it more from trucks, is it more from passengers, that is one question, or any other verticals?

Secondly, you said that we are more 40% the dependency is on Mexico, are we going to reduce in near future?

No, no, let me correct you that 40% is not the dependency of Mexico to our revenue. Mexico's export is 40%, and rest 60% has been selling in domestic in Mexico.

Correct.

Okay. In terms of demand, where we are witnessing more traction, and in next year as well, what we see in terms of demand?

We are witnessing a good demand across the sectors. There is been a sharp demand which is coming in from the OEM in the CV, in the truck and bus segment.

As I said that truck has already crossed its FY19 high numbers in terms of their sale, and we see that traction going forward in the quarters of next year. We are also seeing a good traction coming in from passenger radial, as we are reading that and we are participating closely with the OEMs with an exciting product launches across the passenger car segment.

Plus, as the rural income is also picking up, we are also seeing traction in the farm sector and as well as the two-three-wheeler as well.

Okay. Got it.

Thank you. Thank you, that's all from my side.

I think this question is for Sanjeev ji. Sanjeev ji, can you just explain the current tax and deferred tax calculation which is there, and what's the tax rate for us?

Because we are in the process of implementing the projects, certain projects, therefore, some kind of deferred tax increases every year. Because this gives the benefit in income tax to defer for the amount of new projects, but we are using 25% tax bracket with new regime, actually, we are in JK Tyre.

So 25% is the effective tax rate for us.

Okay. In this particular quarter, how much is the effective tax rate that we have paid?

That will be the same, except that because we were also carrying forward some of the losses in the books of Cavendish in income tax, not in books of accounts, so that some benefit might have come actually our way from CIL when we have got the

Net tax rate kya raha hai is quarter ka?

Around 25% roughly. That is the effective tax.

25.

Yeah. Between the deferred tax and the actual tax payment, and because overall, it will remain 25%.

All right. I think the exceptional items also, you have given the note for that.

I think going forward, this exceptional won't come, right?

There are three exceptional items in this note, which is one is the stamp duty, which is because of the merger incident

One time. and

one-time. The other one is foreign exchange losses, as you would know, there was a huge volatility during the quarter, and this is also not the full sort of the realized loss, I would say, this is mark-to-market partly.

The third one is because of the labor codes. Right.

This is one-time again. All

All of these are one-time, I think, apart from forex.

These two major ones are one-time, and forex losses today could be forex gain tomorrow, but this is mostly the mark-to-market one. Okay.

Anshuman ji, one final thing from my side. The rubber prices have gone up a bit, till what level of rubber prices are we confident that we will be able to maintain the margins?

Rubber prices have gone up, and as I said that our total raw material basket would be hovering around perhaps 1% to 2%, so that will not make much of a impact, because there is a lot of volume push with enhanced capacity, utilization is also at its full.

You are okay with these kind of prices as well, right? You're confident that you'll be able to maintain the margins?

Lower the price, the better it is, but We will plan accordingly in terms of the competitiveness of the market price increases.

Okay. Perfect.

Thank you so much. Thanks.

Thank you.

Thank you so much for joining this conference call for quarter 3. I hope we have given you the answers satisfactorily to your questions.

Good day. Thank you so much.

Thank you.

Thank you. Thank you.