Balkrishna Industries Ltd (NSE: BALKRISIND) Q4 2025 Earnings Call dated May. 24, 2025
Corporate Participants:
Unidentified Speaker
Rajiv Poddar — Joint Managing Director
Rajiv Poddar — Joint Managing Director
Madhusudan Bajaj — President, Commercial and Chief Financial Officer
Madhusudan Bajaj — President, Commercial and Chief Financial Officer
Satish Sharma — Senior President and Director, Strategy and Business Development
Ravi Joshi — Deputy Chief Financial Officer
Sushil Mishra — Head of Accounts; and SGA, our Investor Relations Advisor.
Analysts:
Unidentified Participant
Siddhartha Bera — Analyst
Basudeb Banerjee — Analyst
Pramod Amthe — Analyst
Raghunandan — Analyst
Arjun Khanna — Analyst
Lokesh — Analyst
Amar Kant Gaur — Analyst
Shashank Kanodia — Analyst
Aditya Vikram — Analyst
Presentation:
operator
ladies and gentlemen. Good day and welcome to the Balkrishna Industries Limited Q4 and FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Rajiv Podar, joint Managing Director. Thank you. And over to you sir.
Rajiv Poddar — Joint Managing Director
Good morning. Thank you for that. Thank you to everyone for coming on this call today and being here. I am joined along with Mr. Bajaj, Senior President Commercial and CFO Mr. Satish Sharma, Senior President and Director, Strategy and business development. Mr. Ravi Joshi, Deputy CFO Mr. Sushil Sharma, Head of Accounts and SGA, Our investor relations Advisor. Let me first begin with an overview of our five year strategic plan at bkt. We have set a clear and clear and shared ambition that is to reach a revenue milestone of approximately Rs. 23,000 crore by 2030. To achieve this we are moving forward along with three levers of growth.
Lever 1. The OHT business of ours. Here we aim to achieve 70% contribution on the enhanced revenue by financial year 2030. Lever 2 carbon black. Here we aim to achieve 10% contribution of enhanced revenue by financial year 2030 from third party sales. And lever 3, we now plan to enter new tire categories for the Indian market. This should deliver around 20% of enhanced revenue by the financial year 2030. However, the major contribution of this will come in the back end of this journey. I will now provide more details about all three levers individually. Lever 1 the off highway tire business.
We have achieved global leadership in agricultural tire sector and we intend to reinforce this position across all geographies. At the same time we are ready with a strong product portfolio in other sectors that is Rubber tracks, mining, industrial and construction tires. Our commercial entry into the rubber track segment have been well received and in response to growing Demand the Board has approved the expansion of our dedicated manufacturing facility for rubber tracks. This project is expected to commence production in the second half of financial year 26 and will enhance both our product offering and market reach in the agricultural sector.
In the mining segment, we are proud to say that we are the only Indian tire manufacturer to have developed the all shield radial technology on our own and we produce currently up to 57 inch with full range in both bias and radial technology now in our portfolio. The global mining tire market offers us a clear Runway for accelerated growth. Geographically, we maintain steady progress in Europe while driving expansion across Americas, India and select high potential markets. Our current production capacity stands at 360,000 metric tons per annum and with the already announced CAPEX of 35,000 metric tons and some debottlenecking, we are ready to scale up this production and to 425,000 metric ton per annum.
This gives us the capacity to target an 8% share of the overall market share globally. Any signs of improvement in global macroeconomic and geopolitical environment will act as a catalyst for us to achieve the aspiration of 10% global market share. However, reaching 10% continues to remain our strategic goal to be pursued through modular, carefully phased investment. Lever 2 carbon black over the past three years we have laid a solid foundation for our carbon black business. Our product is now well accepted by major OEMs in India and globally. We aim to position ourselves as a preferred and strategic tire supplier to the tyre industry.
We also see significant revenue and margin potential as in Northern tire segments including the advanced carbon black line of ours which has gone on stream last year to capitalize on synergies with our tire operations and leverage energy and raw material integration. The Board has approved the expansion of our carbon black plant from 200,000 to 300,000 metric tons per annum. Along with this a 24 megawatt cogeneration power plant taking cogent power capacity to 64 megawatt at Boots. This expansion is expected to be completed by early 26. Lever 3 new tire verticals for India India’s economy is growing and so is the demand for all tyre categories.
Further, we also take inspiration from our own journey in the Indian OHT segment over the last five years. From a modest presence, we now hold over 15% share in the agricultural replacement market and have also established dominance in other OHC subsegments. The brand investments that we have done in the Indian market over the last few years have further played a significant role in our success. Following the successful development of our all steel radial platform we believe we now have the right technological base to extend value to newer customer groups. With this, we are now planning a modular entry into the premium passenger car segment and commercial vehicle radial tyre segment with the initial focus on the replacement market for India.
The commercial vehicle radial tire pilot will launch in Q4 of financial year 2526 and then it will gradually be ramped up. The PCR tyres pilot will follow in Q3 of financial year 2627 and then it will gradually ramp up. By 2013 these new verticals are expected to contribute to around 20% of our overall sales leading to approximately 5% market share in India, allowing BKT to participate in non OHC total addressable market market of additional 80,000 crores in India alone. I now move to capital expenditure to support these three levers. We have outlined a capex plan of rupees 3500 crores to be spent over the next three years.
Please note this is to be funded mainly through internal accruals. Let me now touch briefly on our competitive advantages. Our carbon black plant is integrated to generate power which is consumed directly by our tire facilities. It helps us mitigate one of the key cost components in tire manufacturing. Additionally, it also gives us control over one of the key raw materials in the tyre manufacturing journey. Second, we already own the land, have upstream equipment in place and also possess talent and systems required to scale up as we move in this journey. Thirdly, our past investments in brand building in India will now generate greater value across a wider revenue base for us.
On the basis of the above stated competitive advantages, we expect blended margins post full commercialization to be in the range of 23. 25%. This will allow us to grow our absolute EBITDA significantly on enhanced revenue backed by our superior product mix and operational strength. We do not anticipate significant decline in rows once we have achieved full potential. I hope this has provided a clear and structured view of our strategic direction for the next five years. Let me now give you financial highlights. Despite ongoing geopolitical tensions and global economic uncertainty, we have delivered strong performance. We achieved our highest ever annual sales revenue driven by our global footprint and resilient business model.
Volume growth exceeded expectations, highlighting the robustness of our business strategy and also a well laid out execution plan by our team. Looking ahead, we remain focused on strengthening our product lines and market presence. Any improvement in market conditions will act as a strong tailwind in this journey. For the quarter our volume stood at 82,062 metric tonnes, similar to the same period last year. For the full year volume stood at 315,273 metric tonnes recording a growth of 8% year on year. Our standalone revenue for the quarter stood at 2,838 crores registering a growth of 5% year on year.
This includes realized gain on foreign exchange pertaining to the sales of Rs. 91 crores for the whole year. The standalone revenue stood at 10,615 crores registering a growth of 13% year on year. This includes realized gains on foreign exchange pertaining to the sales of Rs. 202 crores. The standalone EBITDA for the quarter was at Rupees 703 crore with a margin of 24.8%. For the whole year the standalone EBITDA was at 2,682 crores registering a growth of 16% year on year basis. The margin for the full year stood at 25.3%. Other income for the quarter stood at Rs.55 crores while for the full year financial year 25 it was rupees 267 crores.
Profit after tax for the quarter was recorded at 362 crores down by 25%. This was primarily on the account of M2M loss to the tune of 58 crore and higher financial cost compared to the same quarter last year. For the whole year, the financial year of 25 we have recorded rupees 1628 crores registering a growth of 13%. For this financial year our capex spend was rupees 1500 crores. Our gross debt stood at 3212 crores. At the end of 31st March 25th our cash and cash equivalents were 3327 crores. Accordingly we have a net cash of Rs.
115 crore approximately. The board of Directors has declared a final dividend of Rs. 4 per equity share subject to shareholder approval in the AGM. This brings the dividends to Rs. 16 per share including the earlier three interim dividends that were given. I reiterate once again before ending that this vision is not just a destination but we see it as a continuous journey of organic growth via modular expansions driven by long term commitment to product and operational excellence, brand building and most importantly stakeholder value creation. At BKT we are focusing not on the near term but for the next 25 years of business growth.
With this I conclude my remarks and leave the floor open to Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session Anyone who wishes to ask a question may press N1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star. And two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Siddhartha Bera from Nomara. Please proceed.
Siddhartha Bera
Yes, sir. Thanks for the opportunity, sir. First question again is on this new segments which we are planning to enter over the next five years. Some more clarity if you can share because these are quite competitive segments in terms of the number of players who are there been operating here for quite some time and we probably being one of the quite late entrants now. So what gives us the confidence of probably the right to win here and how do you think in terms of the product or the brand the sort of ramp up will be here? I’m sure you need to maybe invest a lot more on network brand building as well.
So some color there. How you think about some of the investments now as we enter these new segments? Going ahead?
Satish Sharma
Yeah. Good morning, Siddharth. This is Satish Sharma on this side. Like you rightly said, nothing is ever easy. But our strategy is based on various principles that we have. The first and foremost is the way. Rajiv explained that the way we have entered the demonstrated success that we have in the agriculture and other segments of highway in the Indian market over the last five years is very much evidenced in the kind of things that we can do in the market. And India is a growing economy. The other thing is that our all steel radial technology in off highway also lends itself very strongly to our entry into the truck bus radial markets in India, which is the commercial vehicle segment.
Given the fact that the Indian economy is growing at 6.5%, there is a growth in all these categories. Given our business model and our demonstrated success, we do believe that we can create a difference in the Indian market and we are fairly confident about doing that.
Siddhartha Bera
Got it, sir. On the investments like I was checking, we do spend around 5% every year to sort of improve the brand visibility, both India and global markets. So now with this new photo, do you think that also changes because you need to maybe reach out more to. And we are targeting the replacement segment. So we maybe need to reach out more to the consumers in India. So. And on the network also. So do you think these areas also there will be some change to the investment plans you have over the next few years?
Rajiv Poddar
No, we see ourselves maintaining the level. And you’ll see the benefit towards the end of this five year journey you will see a cumulative benefit coming in. And as the enhanced turnover starts getting accumulated, we start reaching it. You know you will see these spends come in percentage terms come down. So the benefit once it is reaped, you will see it come down.
Siddhartha Bera
Got it sir. Lastly sir, on this capex spend of 3 and a half thousand crore, possible to break up how much you are planning for each segments and what does it mean for our capex spend for FY26?
Rajiv Poddar
No, we don’t have. I mean we are not ready with a breakup. Since the budget has just been approved to be spent by the board of directors through over the next three years. Now we will work out in more detail and work on that.
Siddhartha Bera
But sir, for FY26, how much should we assume? Any color there?
Rajiv Poddar
About thousand to fifteen hundred.
Siddhartha Bera
Okay sir. Got it done sir. I’ll come back in with you.
operator
Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference please limit your questions to two per participant. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please proceed.
Arjun Khanna
Sure. Thank you for taking my question. Sir, just continuing with the previous participant question. So when we say pilot plants of PCR and pbr what capacities are we talking about for the pilot plant and B in terms of selling of the output are we looking at just the domestic market or potentially we are looking at export and tie up with OEMs abroad?
Sushil Mishra
Arjun, to answer the last part first, essentially the capacity is being put for the domestic market in phase one. And as you would know that earlier we had announced our entry into mining tbr. So our truck bus radial tire likely is going to come from that capacity. And that also allows us to enter the market relatively earlier.
operator
Ladies and gentlemen, it seems like the management’s line has got disconnected. Please stay connected. I’ll rejoin. Foreign. Ladies and gentlemen, thank you for waiting patiently. We have the management’s line connected with us.
Satish Sharma
Sorry for the technical glitch. We got disconnected. We are reconnected now we’ll restart our answer. Yeah, so I was saying that the truck bus radial tires we are going to come from our existing already announced mining TBR capacity in the earlier times. So that will allow us an early entry in the truck bus radial market. And as far as car radial is concerned it’s going to be a little later in the time horizon. The entry is in the domestic market only. And in A phased manner. So the capacity planning, etc. Is still being worked out.
Arjun Khanna
Sure. So there is no capacity. All could let us know at this point in time for both of the segments.
Rajiv Poddar
No, as he said we are working on that and we don’t have that breakup.
Arjun Khanna
Right. Sir, the second question, just moving to the core business currently. Is there any guidance you could provide us with for FY26 in terms of volumes given that we are starting the year. And secondly in terms of the carbon black, if you could help us with how is that trending given that it would have come on stream during FY25.
Rajiv Poddar
So regarding the core business of our 5A. We cannot give any guidance under current global scenario because it’s very volatile. With the trade wars going on in one part of the world. Geopolitical wars going on in the other parts of the world. So we cannot give you any visibility on that as far as the carbon black specialty is concerned. I’ll give it to Mr. Good morning.
Unidentified Speaker
So carbon specialty business started only in the last quarter. So only trials are going on. It will take some time to take the business forward.
Arjun Khanna
And do we see what would be the outlook be for FY26? Would we see peak utilization in 27.
Rajiv Poddar
For the advanced carbon black?
Unidentified Speaker
No.
Arjun Khanna
Yes sir.
Unidentified Speaker
You are asking for new capacity or. Advanced carbon
Arjun Khanna
for the specialty carbon black sir.
Unidentified Speaker
27. Yes, we should see 2627. Sun utilization will be there.
Arjun Khanna
Sure. I’ll come back in the queue. Wishing you all the best.
operator
Thank you. The next question is from the line of Basudev Banerjee from CLSA. Please proceed.
Basudeb Banerjee
Yeah ma. Morning Potaji. A couple of questions. 1.
Satish Sharma
Good morning.
Basudeb Banerjee
With this kind of tariff uncertainty scenario and geopolitical aspect which you highlighted. So what is the inventory situation in your end distribution? Has there been any pre buying before fearing? So this wholesale number, how to look at that from inventory perspective?
Rajiv Poddar
The inventory at our distributor level is stable at the level that we wanted to desired level. So it’s stable.
Basudeb Banerjee
Okay. That’s perfect. And second thing sir, as you rightly said, domestic ex oht tire market being around 80,000 crore. And your desired revenue of 4300 crore is 5%. But by FY30 this 80,000 crores might move up to a lakh crore plus. And then the market share after FY30 at your initial investment is going to be sub 4%. So do you think that at such a marginal presence it will help you to derive industry competitive profitability efforts from that angle?
Satish Sharma
Like Rajiv has already explained that we derive A fair amount of competitive advantages in the way that we plan to enter the market and we see that playing out for us. As regards the marginal presence that you mentioned, our plan is going to continuously evolve given the and we will base it on the response that we get from the market and we are hoping that we will get a strong response and if that plays out the way we have envisaged then we will accordingly keep on evolving our own plan to enter the market.
Basudeb Banerjee
Last quick question or Bajaj, this new project which you said 3, 500 crore combined capex and existing business capex of thousand to 1500 crore then would it be right to assume 2500 crore kind of capex in 26, 27, 28 each year.
Madhusudan Bajaj
Three years 3500 crore we invest. Will be spent
Basudeb Banerjee
that is for the new projects and existing OST business maintenance and growth capex that will be.
Madhusudan Bajaj
That will be separate. That will be separate.
Basudeb Banerjee
The combined capex per year can be 2500 crore.
Rajiv Poddar
It will be between 1500 and 1800 at a peak because those capex may also come down once you’ve already done those capex so it won’t be continued in the OHT business so much.
Basudeb Banerjee
Okay, so largely the new project capex will be more towards FY 28 to 30 and not 26 to 27. And by the time the OHP capex. Will slow down
Rajiv Poddar
it will be 26 and 27 and then you will start reaping the benefits of it in the 28 to 30.
Basudeb Banerjee
Sure. Understood. Thanks.
operator
Thank you. The next question is from the line of Pramod Amther from in Crade equities. Please proceed.
Pramod Amthe
Yeah, hi, thanks for taking my question. First of all I wanted to understand what criteria did you use other than your expertise in the normal radial technology to expand the new segment. The reason to ask is are there any financial ROC parameters used or why didn’t you try to enter two wheelers which might be relevant considering the rural penetration for two wheelers.
Rajiv Poddar
We’Ve used a mix of. I mean there are a lot of parameters which go behind the scene to make a decision and convince the board but that was all for internally to be, you know, used to convince the board and now that they’ve given those clearance we are going ahead with our project. It may not be possible for us to explain all the decisions at points that we were looked at to convince our board but all the lot of parameters were definitely looked into and any.
Pramod Amthe
Reason to keep the two wheeler tires out or you may look at it at a later Stage we are already.
Satish Sharma
Present in two wheelers, albeit in a very small way and we hope to grow that business as well.
Pramod Amthe
Sure. And the related question is if I have to look at your manufacturing processors, they seems to be relatively on a lower volume, very high tire size tires which is more of a batch product.
Satish Sharma
Can you repeat your question? Can you repeat?
Pramod Amthe
So my question is more like the new segments which are entering there seems to be a continuous process driven tire production versus the existing one where you specialize into a batch production for OHT or farm tires. So what type of manufacturing expertise you need and what we need to as investors watch out in terms of scrap or efficiency of the existing plants to bring in.
Satish Sharma
So firstly, you’re very right in your observation. My compliments to you. So from our existing manufacturing there are obviously we’ll draw synergies and capabilities which are also needed in the business that we are getting into. At the same time we have to develop new capabilities. So we are pretty much ready to deliver what it takes in adding the new capabilities which are needed. But at the same time we are going to be enormously helped by the existing capabilities. After all it’s a tire manufacturing process which is not very different though the nature of businesses as you pointed out is different.
So it’s a mixed bag.
Pramod Amthe
So thanks for the gigant answer. If I can ask one more question. You guys have been smart enough to identify niches within the tires and command the market share or the profitability. Do you see such opportunity within the broader truck tire space or within the car tire space which exists which you can exploit over a period of next 3, 4 years?
Satish Sharma
Thanks for complimenting us on the strength that you have identified. We do hope to carry this trend Forward .
Rajiv Poddar
and just to add on to that, we are looking at such niches and that sort of. We are confident that despite entering competitive segments, our overall at peak, once we achieve full expansion and revenue, our EBITDA margins may not be diluted that much because we are going to focus on premium niches within these sectors. So we are not going to be catering at generic level. We will continue our specialized approach. That is what has got us to this level will be continued in that. So that’s why we are confident of our EBITDA margins and roast being at the levels where they are currently marginal.
Pramod Amthe
Sure. Thanks a lot of us.
operator
Thank you. The next question is from the line of Raghunandhan from Nuvama Research. Please proceed.
Raghunandan
Thank you sir for the opportunity. Firstly, on the point which you highlighted that the focus will be on premium measures, can you elaborate more on the target segments? Within the pcr? Would you be focusing on certain diameter and above? And within the tbr, what would be the focus areas for you?
Rajiv Poddar
Let us work on it. We would not like to diverge this information at this moment. But as and when things play out, we’ll definitely keep everybody aware of what we are doing. But not at this stage.
Raghunandan
Got it sir. And I understand that out of 3,500 crore the exact breakup plans, everything are yet to be finalized. Not asking for the near term number but by 2030 you are working with about say 4600 crore of revenue target. Which would mean that even if I assume 1.5 times gross asset turnover, a minimum capex of 3,000 crore would be required. Would that be a fair way to think about the long term capex requirement?
Rajiv Poddar
Roughly yes. Good. Rule of thumb. Roughly yes. But with that we have to remove the some of the synergies that are already there. As I mentioned, we have the land, we have some upscale equipment. So you can remove that and reduce that cost which will be accommodated in the OHC and carbon business. That’s why we are quite confident that with this spend of 3500 crore we should be able to hit our expected revenue of 23,000 crore.
Raghunandan
Understood. So with this 3,500 crore we should be ready to achieve the targets of that 30% revenue from both carbon black and 20% revenue from TBR and PCR.
Rajiv Poddar
Yes, yes. Yes.
Raghunandan
Sir, on the US tariff which you alluded to currently, would you be incurring the 10% base tariff for current exports to US and is this passed on to customers or are you absorbing the impact?
Ravi Joshi
So it is being partly split between us and the customer.
Raghunandan
Got it. So currently, I mean the earlier tariff was say 2.5% to 3% and now it has gone to 10%. So that delta of say 7% you are saying is partly being passed on and partly being absorbed. Would that be right?
Ravi Joshi
So the tariff is over and above whatever was there existing. So 10% is being split between us and the customers.
Raghunandan
Got it sir. And very near term can you indicate your expectation for commodity cost for Q1 and freight expectation whether you expect any benefit on gross margin?
Madhusudan Bajaj
Okay, so freight is almost stable and. Raw material prices are coming slight down. So maybe some benefit we will see in the next quarter.
Raghunandan
Can you quantify sir? Would it be like 2, 3% benefit on a QQ basis? Q1 versus Q4?
Madhusudan Bajaj
About approximately 1%.
Raghunandan
Got it sir. And lastly, can you share the hedge rate for FY26.
Madhusudan Bajaj
We don’t have Andy number as of now. We’ll circle back with you.
Raghunandan
Thank you so much sir. Wishing you all the best on all the new plans.
operator
Thank you. The next question is from the line of Lokesh from Vallim Capital. Please proceed.
Lokesh
Yes. Hi. Good morning to Rajiv and team. My first question.
Rajiv Poddar
Good morning.
Lokesh
My first question was on the margins. If we see the peers in the Indian market they enjoy somewhere around 12% on an average cycle adjusted EBITDA margins. So you know, just briefly what gives you the confidence that you know margins will not be dilutive? I mean we are talking about a double jump. When you say 23 to 25% you’ll be able to maintain your long term average within these segments. So it’s a big jump. So just trying to understand.
Rajiv Poddar
Firstly let me clarify in the next two years, operational financial years, there will be no dilution because our new business will not come on stream. One, as I mentioned that revenue and the sales will come towards the back end of this. Secondly, it will be a very small component of my overall business. It’s going to be rather small. You know, it’s going to the 70% of my revenue yet comes from the OHT part of the business. And thirdly, as I mentioned earlier we are going to focus on premium niches and not at a very mass level and generic sort of commodity business of within those segments also.
So all these three put together in some certain competitive advantages that I enjoy. All of that put together I am quite confident that along with my team that we are going to be able to maintain our blended margin. So we are not talking about individual margin of the new vertical or carbon or oht. We are talking about a blended margin to be maintained at these levels.
Lokesh
Right, Fair enough. Rajiv. Second question was on the rubber track, if you can just throw some light some more details on what are these applications and where they’re going. And just a follow up to that is, you know, in the with your new strategy to enter new tires in India, are you targeting replication of your distribution network as in your current distribution network is also doing OHT and are they also present in TBR and TCR which is giving you confidence to scale.
Rajiv Poddar
So regarding the rubber tracks, as you are aware that we had started our pilot project earlier and we have got good response, good feedback for our products and with the success of that we are now looking to expand that we are going to be catering to agricultural tracks as well as construction and industrial tracks. So that completes the whole gamut of applications in the rubber track segment. As far as the production, sorry, the distribution network for the new verticals, we are yet working on it. We have just got our approval now and we will start working.
So it is too early to comment on what kind of a network we will use and all. But yes, we have lot of in house strength and knowledge about the route that we need to take. But we are going to start putting it into action and we will come back to come back with more details as and when it plays out in the marketplace.
Lokesh
Just last clarification, Rubber track will be domestic and export both.
Rajiv Poddar
Yes, yes. All of our OHT line is going to be for global market including India. It is just the new verticals which are going to be pertaining to Indian market.
Lokesh
So that should take you to the 8% conservative market share and the 10% of the macro is in your favor.
Rajiv Poddar
Yes. So yes, absolutely you’re correct. So you actually taken the words out what I was going to tell you that we are currently at 6% and we are seeing, we are seeing the business growing to about 8%. However as I mentioned, our global vision yet remains or ambition remains to be 10%. Please note that we are under a slow moving economy. There are wars happening, there are trade wars happening. Uncertain times are there. So that is why we are looking at it very conservatively in case anything changes and there’s a catalyst. We are absolutely ready to pounce on that opportunity and go back to our original vision of 10%.
So that yet remains our ambition at BKT.
Lokesh
That’s it from my side. All the very best. Thank you so much.
Rajiv Poddar
Thank you.
operator
Thank you. The next question is from the line of Sonal Gupta from HSBC Mutual Fund. Please proceed.
Unidentified Participant
Yeah. Hi, good morning and thanks for taking my question sir. Just like you’ve announced this plan on premium PCR etc. So premium and I mean like are we talking about price positioning or are we talking that we’ll be in the 16 inch and above sort of categories? That’s the target.
Rajiv Poddar
As I mentioned earlier. It’s too early to give out these details as and when we are. We have executed our plans, we will share those details but it’s too early to share that at the moment.
Unidentified Participant
And I mean related to that. Right. Like would we need any sort of technological tie ups here?
Rajiv Poddar
No, we have done more complicated stuff like the mining tires, radial technology as I mentioned in my opening comments. So we do not envisage a requirement for any tire. We are quite confident of our in house capability.
Unidentified Participant
Got it. And could you give me what is the revenue from carbon black for FY25?
Rajiv Poddar
It is roughly about 8, 8%, 8 to 9%.
Unidentified Participant
So I mean like. So in the, I mean like over the medium term, just trying to get like. Is your understanding now that on the, on the OHT side we will sort of be able to grow at about 10% odd. And then, and then given that the cash flows we’re generating we can invest in these new areas to speed up our growth. Is that the thought process?
Rajiv Poddar
Yes.
Unidentified Participant
Okay. Got it, sir. Thank you so much.
operator
Thank you. The next question is from the line of Amarkand Gaur from Access Capital. Please proceed.
Amar Kant Gaur
Hi, good morning everybody. Thanks for taking my question. I had two pronged questions. One is if you could maybe elaborate a little bit more on maybe lowering your market share target and maybe throw. Some light on how has that market. Share trended over the last three to four years?
Rajiv Poddar
We have not lowered any target. Sorry. At least in the near term.
Amar Kant Gaur
Hello?
Rajiv Poddar
Yeah, sorry, your voice was muffled. We couldn’t pick that up.
Amar Kant Gaur
Is it better now?
Rajiv Poddar
Yeah, yeah.
Amar Kant Gaur
So maybe you can throw some light on how has our market share trended over the last maybe five, six, eight years? And from that maybe build upon what now? We are looking at maybe 8% kind. Of market share versus 10% that we had earlier.
Rajiv Poddar
So over the last few years we have constantly been taking market share. We have grown from modest levels of 2 to 3% and for a long time we were at about 4 to 5% and now we are at about 6%. So that’s of the global OHT market segment. And as I mentioned earlier that we are currently under the current geopolitical and uncertain economic times. We are envisaging it to grow to 8% market share globally in case there is any improvement from here. We are ready to go back to our vision of 10%, which is our dream and ambition.
In case that can be speed up or hastened up, we will not leave an opportunity to pounce on that. But we are being conservatively saying that by 2030 we now see it to be 8%. So anything from here will be an improvement in the conditions, will only help us improve our vision to get to 10% so that yet remains our strategic goal.
Amar Kant Gaur
Okay, thanks. Thanks for that. My next question is on the new lines of business that we are building in and you talked about maybe the. New business is not being very roce dilutive. So what would be the internal targets. Or anything aspirations that you would have. In these new businesses that make you. Confident that you’ll be able to maintain your ROCs to current levels.
Rajiv Poddar
We are working on that internally. I would not like to disclose my strategy out at the moment. As I mentioned earlier, once it is played out in the marketplace, we will come back and share those details with you.
Amar Kant Gaur
Finally again on the, on the new lines of businesses. So now we see that you guys. Are in terms of our business quite resilient in terms of volatility of RM having an impact on your, on your overall margins, gross and EBITDA. And now that we are getting into 30% of our business would be outside of this and would be more expensive opposed to raw material volatility. How do you cope with that and any thoughts you have on that? Because that will lead us to be more cyclical in terms of our margins.
Rajiv Poddar
I think it’s a work in progress. We have proved in the current set of business also that we are able to counter a lot of scenarios and that has been our strength. We will continue that strength and as and when any issues are coming up, we will come up with a way to tackle it. It’s too early to give you a definitive answer on our strategy and thought process because we would like to let it play out in the marketplace and then come back to you. Okay, but internally we have covered our basis. So if that gives you confidence, we have covered our bases.
Amar Kant Gaur
Thanks and all the best.
operator
Thank you. The next question is from the line of Joseph George from iifl. Please proceed.
Unidentified Participant
Hi, thank you for the opportunity. I just have one question which is on CapEx, so I just want to get the numbers right. So the 3500 crores is only in relation to the new projects and that you mentioned will be front ended with heavyweights in FY 26, 27 and maybe a smaller amount in 28 because for new projects we’ll have to do the CAPEX upfront. So is that right?
Rajiv Poddar
Yes, absolutely. Okay.
Unidentified Participant
And so what is the guidance for the CAPEX on the OST side? You did not give out specific numbers but should we think of similar numbers as we have seen in FY25 continuing in 26, 27, 28? Broadly,
Rajiv Poddar
yeah. So I mean we’ve already in our earlier approvals from the board, We’ve got a 35,000 metric ton expansion approved which is ongoing. After that there will be only a maintenance spend on the OXT part of the business.
Unidentified Participant
So does that mean much lower levels, maybe 700 to 1000 crores annual capex on OST for the next two, three years. Just try to get a Handle on the number?
Satish Sharma
Yeah, maybe 500 to 700. On the maintenance side.
Unidentified Participant
On the maintenance side. Understood. And to get to the 425, 430 thousand tons, you don’t have to spend anything more. I mean nothing major,
Rajiv Poddar
maybe some minor. Demotelling but in this current spends of maintenance we should be able to do that.
Unidentified Participant
Understood sir.
Rajiv Poddar
So this is after the capex done for 35,000.
Unidentified Participant
Understood, understood. And the second clarification I needed was on the margins. So you mentioned that the 23 to 25 margin is something that you’re seeing in steady state. That is once the new projects of the India TBR and India PCR reach steady state, does it mean that in the interim maybe FY28, 29 when those businesses are really subscale, we will see lower levels of margins. And then when those businesses reach maybe sufficient scale on an improving trajectory, get to 23 to 25. Hello.
Rajiv Poddar
Little bit marginally lower. Very marginally lower.
Unidentified Participant
Understood, Understood. Just wanting to get a hold on the trajectory. Understood sir. Thank you.
operator
Thank you. The next question is from the line of Shashank Anodia from ICICI Securities. Please proceed.
Shashank Kanodia
Yeah, thank you team for the opportunity. So just wanted to check you know in this tariff thing does it put us in any advantage position visible other southeast economies?
Madhusudan Bajaj
Yes, it put us in advantage position because on Thailand and Vietnam these countries the territory is more than any India.
Shashank Kanodia
Okay. Have we witness any shift in volumes towards these countries? Is that trend evident now in the. Numbers
Madhusudan Bajaj
there are majority on the TBRPC are those segment. So not any visible side.
Shashank Kanodia
Okay. And second, so what is the sustainable, you know margins in the carbon division? Because you know some of the peers which are listed and with decent amount of specially domain are clocking something like 15, 16% margin at the peak. So what’s the margin trajectory right now and what is the outlook over there?
Rajiv Poddar
We don’t have that breakup handy of each division.
Shashank Kanodia
Okay, and are we looking some more of an export play in the capital bank domain or it’s going to be more domestic sales because as in the peers are also kind of expanding aggressively in this domain.
Madhusudan Bajaj
Currently it is domestic mode but in. The coming time export also.
Shashank Kanodia
Lastly you know given the ASP’s data currently, so with 4.25 lakh tons of tonnage the realizable revenue seems to be closer to 13,000 odd crores versus our target of 16,000 crores by 2030. So how do we reach this 20% gap? So it’s going to be more of a you Know product mix change, LED realizations or you’re building some inflation to asp.
Rajiv Poddar
The mix of everything. So some marketing spend which will take us improve our asp Product mix will change. There will be lot of. There are a lot of factors to put in that inflation will come. Dollar will. You know the exchange rates will come, market positioning will improve, product mix will improve. So it’s a mix of everything.
Shashank Kanodia
Thank you so much. Visual.
operator
Thank you. The next question is from the line of Mumuks Manlesha from Anandrati Institutional equities. Please proceed.
Unidentified Participant
Yeah. Thank you sir for the opportunity. So this quarter redemption have improved Q by 3%. Can you explain what led to the improvement?
Rajiv Poddar
We can’t hear you. We can’t hear you. Please can you speak? Can you hear me?
Unidentified Participant
Sir is better, sir.
Rajiv Poddar
Yeah.
Unidentified Participant
So. So this quarter realizations have improved Q and Q by 3%. So what has led to the improvement? Any price hikes have been taken, sir. And in US market what kind of price hike we have taken post the trade changes.
Rajiv Poddar
So the there’s been no prices. It’s a product mix and hedge rate. And us there is no price high on the trade fair. As my colleague mentioned, we are sharing the. I mean some sort of share arrangement is there for the trade impact.
Unidentified Participant
Got it. That’s all from my side. Thank you so much.
operator
Thank you. The next question is from the line of Aditya Vikram from DB Securities. Please proceed.
Aditya Vikram
Thank you for taking my question. One of the things which we have noticed is that Q on Q and. Yoy the margins have dipped down. Right? What led to these pressures? Can you please call it out? As to the raw material prices have been benign. But still the margin has come down.
Madhusudan Bajaj
No, last call. Also we told that raw material prices are going up and will be peaking in this quarter. So there will be some decline. There can be 1 or 2% decline in the margin and it is in line with it.
Aditya Vikram
Okay. Okay. Thank you. And sir, so going forward, what would be the steady state of margin which we are trying to achieve as a firm? Considering all the geopolitical pressures and everything. Which is surrounding us, what would be the steady state of margin which we can price in.
Madhusudan Bajaj
Around 25%.
Aditya Vikram
Okay, so this is 1/4 blip. You don’t foresee that, right? To continue as a trend even with the trade wars. Okay, so one other question. Most of our businesses are in Europe, right? Or most of the revenues which we. Derive are from European region. Now if from conversation which happened after the results which were published yesterday, the tariffs are significantly hiked from June 1st. Do you see our company to be impacted significantly from that or do you not see a lot of difference in what is happening and how the sales will pan out?
Rajiv Poddar
Too early to comment. There are statements which are coming up on a daily basis. We are tracking it. But too early to comment on its impact.
Aditya Vikram
That is fine, sir. But if, if at all it happens, do you see a significant pressure on our firm or do we have levers to ensure that these impacts are not impacting us?
Rajiv Poddar
My friend, we can’t offer any comment on that at the moment.
Aditya Vikram
Okay. Okay. Thank you very much sir.
operator
Thank you. The next question is from the line of Alok Shah from SRI pms. Please proceed.
Unidentified Participant
Am I audible? Sir?
Rajiv Poddar
Yes.
Unidentified Participant
Sir. Just want to understand the part of your manufacturing process that do we use a recycled content in our tire manufacturing and if yes then can we foresee an improvement in the future margins of the product?
Rajiv Poddar
Some marginal is used. We cannot but comment a lot on that because that gives up our some recipes decision. So we for the macro level, yes, we are using some recycled part of it.
Unidentified Participant
Okay. And secondly, is there any government regulation coming or any compulsion of pyro by the government that you have to use recycled content or a some percentage of recycled content in the tire?
Rajiv Poddar
There is no regulation at the moment.
Unidentified Participant
Okay, thanks. Thanks a lot sir.
operator
Thank you. Ladies and gentlemen, we take that as the last question. I would now like to hand the conference over to the management for closing comments.
Rajiv Poddar
So I’d like to thank everyone for taking the time out and hearing us and we look forward to meeting you next quarter. Thank you. Stay safe. Bye.
operator
Thank you on behalf of Balkrishna Industries limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.