Balkrishna Industries Limited Q3 FY26 Earnings Call Summary

Summary

Balkrishna Industries Limited - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026 11:00 AM IST

Event Participants

Executives 5 Madhusudan Bajaj (Senior President, Director Commercial & CFO), Ravi Joshi (Deputy CFO), Sushil Mishra (Head of Accounts), Rajiv Poddar (Joint Managing Director), Satish Sharma (Senior President, Director Strategy & Business Development)

Analysts 6 Abhishek Jain, Aditya, Chirag, Mumuksh Mandlesha, Pramod Amthe, Raghunandhan, Siddhartha Bera

Financials & KPIs

Geographic & Segment Commentary

• India: This segment continues to outperform all other markets with sustained momentum following the GST reduction and favorable monsoon. Management noted broad-based demand across all product segments and channels, though it carries a marginally lower ASP compared to exports.
• Europe: Witnessed a rebound as destocking levels stabilized and dealers anticipated a better upcoming season. The implementation of EUDR norms has been deferred by one year to January 1, 2027, and the recent India-EU FTA is expected to facilitate more seamless trade.
• Americas: Volumes remain down YoY due to the ongoing US tariff situation, but Q3 saw sequential recovery (momentum regained from Q2). The company is sharing the tariff impact with channel partners to maintain market presence while waiting for the geopolitical situation to stabilize.

Company-Specific & Strategic Commentary

• Carbon Black Capacity: Commissioned a new line taking total capacity to 265,000 MTPA; the incremental capacity is designated for external sales as internal needs are fully met.
• CV/PV Foray: Projects for Commercial Vehicle (CV) and Passenger Vehicle (PV) tires are progressing as per schedule with a pilot launch expected in Q4 FY26.
• Advanced Products: Rubber tracks are currently under validation at Original Equipment (OE) manufacturers; specialty/advanced carbon black is undergoing sample approvals at various sites.
• ESG Leadership: Achieved an S&P Global Corporate Sustainability Assessment score of 58, placing the company among the leading tire manufacturers in sustainability.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Regional Performance & US Tariffs

• Question: What led to the rebound in Europe and what is the strategy for the US tariff hit? (Mumuksh Mandlesha/Abhishek Jain)
• Answer: Europe benefited from the end of destocking and seasonal demand (Rajiv Poddar). In the US, BKT is sharing the tariff burden with distributors to retain market share, though exact quantums are not disclosed (Rajiv Poddar).

Financials & Margins

• Question: How are currency hedges and higher India sales mix impacting margins? (Siddhartha Bera)
• Answer: EUR-INR realized rate was ₹97 for Q3. While India has lower ASPs, the increased volume and operational efficiencies are keeping EBITDA levels at par with historical averages (Rajiv Poddar/Ravi Joshi).

New Business Segments

• Question: What is the update on the CV/PV pilot and rubber tracks? (Siddhartha Bera/Pramod Amthe)
• Answer: CV pilot starts in Q4 FY26 as scheduled. Rubber tracks are under validation with OEs and expected to ramp up in coming quarters (Rajiv Poddar).

Carbon Black Expansion

• Question: What is the roadmap for the new carbon black capacity? (Abhishek Jain/Chirag)
• Answer: Total capacity is now 265,000 MTPA. All incremental volume is for external sale; advanced specialty carbon is currently in the sample approval phase (Madhusudan Bajaj).

Key Takeaway

Balkrishna Industries delivered a resilient Q3 FY26, characterized by a 15% sequential volume growth to 80,620 MT despite persistent geopolitical headwinds. The standout performer remains the Indian market, which continues to outpace global regions following tax reductions and strong agricultural demand. While US volumes are still impacted by tariffs, BKT has successfully regained some momentum by sharing cost impacts with channel partners. Strategically, the company has expanded its carbon black capacity to 265,000 MTPA and remains on track for its scheduled entry into the CV and PV segments in Q4 FY26. Management maintains a cautious but optimistic outlook, navigating raw material inflation and currency volatility through disciplined hedging and a shift toward high-growth domestic demand. The company is positioned to capitalize on its long-term Vision 2030 once global export conditions and US tariff pressures normalize.