Summary
JK Tyre & Industries Limited - Q3 FY 2026 Earnings Call Summary Monday, February 09, 2026, 4:00 PM IST
Event Participants
Executives 4 Anshuman Singhania (MD), Arun K. Bajoria (Director & President - International), Sanjeev Aggarwal (CFO), A. K. Kinra (Financial Advisor)
Analysts 4 Abhishek Jain, Aditya Akani, Bharat Bhagnani, Nandan Pradhan, Ronak Mehta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹4,235 crores | +15% YoY; Highest ever revenue driven by 16% domestic volume growth and premiumization. |
| EBITDA | ₹583 crores | +74% YoY; Significant expansion due to operating leverage and favorable raw material mix. |
| EBITDA Margin | 13.8% | +470 bps YoY; Supported by product mix (high rim sizes) and high capacity utilization. |
| Profit After Tax (PAT) | ₹209 crores | +267% YoY (3.7x); Surged due to strong operational performance and integration synergies. |
| Net Debt | ₹4,183 crores | Stable vs ₹4,201 crores in Q2; Net Debt-to-Equity stands at 0.71x and Net Debt-to-EBITDA at 2.17x. |
| EPS | ₹7.29 | +294% YoY; Jumped from ₹1.85 in the corresponding previous quarter. |
| Capacity Utilization | 90% (India) | Radial utilization exceeded 95%; Consolidated utilization remained over 85%. |
Geographic & Segment Commentary
- Domestic Market: Recorded 16% volume growth, with the Replacement segment up 11% and OEM up 24% (excluding 2/3W). Revenue mix is dominated by Truck & Bus (58%) and Passenger Car Line (27%).
- JK Tornel (Mexico): Revenue grew 21% YoY to ₹616 crores, achieving highest-ever Q3 sales. EBITDA margins improved by 148 bps to 9.4%, supported by a 40% export mix and strong mass merchandiser sales.
- Exports (India): Grew 9% in volume terms despite geopolitical uncertainties. Management is optimistic about future growth through potential FTA deals with the EU and USA.
Company-Specific & Strategic Commentary
- Capacity Expansion: Approved new capex of ₹1,130 crores to expand TBR, ASLTR, and PCR capacities by nearly 7%. This forms part of a larger ₹5,000 crore 5-year strategic plan.
- Cavendish Merger: Completed the merger of Cavendish Industries Limited (CIL) with JK Tyre effective April 1, 2025. The turnaround saw CIL utilization rise from 30% to 95%, expected to yield financial and operational synergies.
- Product Premiumization: Increased the share of 16-inch and above PCR tyres from 27% to 31% YoY. Launched “Embedded Smart Tyres” for passenger cars and specialized OTR tyres for mining and industrial use.
- EV Focus: Secured new OEM approvals for EV-specific tyres for the Hyundai Creta EV and Tata Punch EV, expanding the “Ranger HPe” product line.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Mid-double-digit | Expected to continue momentum into FY27 based on robust OEM and rural demand. |
| EBITDA Margin | 13% - 15% | Management remains confident in this band despite a projected 1-2% rise in RM costs. |
| Capacity | ~7% increase | New projects (₹1,130 Cr) to be completed within 1-2 years across multiple categories. |
| Raw Materials | 1% - 2% increase | Management expects RM prices to remain range-bound in the near term. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Inflation | RM basket is expected to inch up by 1-2% in Q4. Management plans to offset this through volume growth and selective price revisions. |
| Regulatory Changes | Implementation of four new Labor Codes resulted in a one-time exceptional charge of ₹56.75 crores for retiral obligations. |
| Geopolitical/Trade | USMCA revision in July 2026 is critical for the Mexico-USA trade corridor. Global geopolitical uncertainties remain a watchpoint for exports. |
Q&A Highlights
Growth Drivers
- Question: What is the split between volume and pricing in the 15% revenue growth? (Bharat Bhagnani)
- Answer: Growth was primarily volume-driven (16% domestic growth) with only minor price increases in selective SKUs. (Sanjeev Aggarwal/Anshuman Singhania)
Capacity and Pricing Power
- Question: With utilization at 90% and industry-wide capex, is there room for price hikes? (Ronak Mehta)
- Answer: While demand is buoyant and supply tight, price revisions will be undertaken based on market dynamics and supply-demand parity. (Anshuman Singhania)
Mexico Business Performance
- Question: How much of the Mexico growth was currency-related versus organic? (Ronak Mehta)
- Answer: Revenue grew 21% in INR terms; however, in constant currency, performance was flattish, indicating significant benefit from Rupee depreciation. (Arun Bajoria/Sanjeev Aggarwal)
Exceptional Items
- Question: Can you clarify the one-time charges in the P&L? (Bharat Bhagnani)
- Answer: Exceptional items included stamp duty for the CIL merger (one-time), MTM foreign exchange losses, and ₹56.75 crores for new labor code retiral obligations. (Sanjeev Aggarwal)
Key Takeaway
JK Tyre delivered a record-breaking Q3 FY26, characterized by its highest-ever consolidated revenue of ₹4,235 crores and a 3.7x surge in PAT to ₹209 crores. Performance was underpinned by robust domestic volume growth (16%) and a strategic shift toward premiumization, with large-rim PCR tyres now comprising 31% of the mix. The successful merger of Cavendish Industries and the turnaround in Mexico (JK Tornel) have strengthened the balance sheet, maintaining a healthy Net Debt-to-Equity of 0.71x. Management is aggressively expanding capacity with a fresh ₹1,130 crore investment to meet surging OEM and replacement demand. While raw material costs are expected to rise slightly by 1-2%, the company maintains a confident 13-15% EBITDA margin guidance. Looking ahead, JK Tyre is well-positioned to capitalize on infrastructure-led CV demand and the secular trend of electrification in the PV segment, with a clear focus on sustaining mid-double-digit revenue growth into FY27.
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