Indian polymer recycler maintains revenue stability despite global tyre market weakness. Company proceeds with ₹2.5 billion expansion plan and cost-saving solar investments.
GRP Limited (NSE: GRPLTD) recorded stable total income for the third quarter ended Dec. 31, 2025, though profitability declined sharply due to macroeconomic headwinds and increased input costs. Consolidated profit after tax, excluding exceptional items, dropped 49% year-on-year to ₹23 million. Stock performance and investor sentiment remain tied to the company’s ability to navigate high raw material prices and ongoing stabilization of new projects.
Global Market Pressures Affecting Company Margins
The company’s performance was influenced by persistent industry headwinds, including subdued global tyre demand and inflationary pressures on input costs. Domestic reclaimed rubber consumption rose 4% year-on-year, but global markets remained under pressure, particularly in Europe and North America. U.S. tariffs continued to impact the Custom Die Forms business, contributing to a 45% decline in export margins during the quarter. Furthermore, the company implemented new labor code provisions regarding gratuity, resulting in a ₹14 million exceptional cost.
Rubber Inflation Impacts Quarterly Earnings Performance
For the quarter ended Dec. 31, 2025, total income reached ₹1,352 million, representing a nominal 2% increase over the previous year. EBITDA declined 14% to ₹112 million, with EBITDA margins contracting to 8.3% from 9.8% in the prior-year period. Gross margins fell by 383 basis points to 49.3% as inflation impacted select rubber grades, which rose approximately 45% year-on-year. Domestic revenues grew 14% during the quarter, supported by a strategic focus on non-tyre segments, while export revenues for the nine-month period declined by 9%. For the nine months ended Dec. 31, total income remained flat at ₹3,930 million, and adjusted profit after tax fell 47% to ₹60 million.
Strategic Reassessment of GRP’s Polyolefin Subsidiaries
GRP is executing a capital expenditure plan of up to ₹2.5 billion over a three-year period. Phase 1 of this investment involves deploying ₹1.5 billion by December 2025, focusing on new technologies for lower-emission reclaimed rubber, crumb rubber expansion, and plastic recycling. The company’s crumb and pyrolysis units in Solapur have already commenced operations, though they are currently operating at sub-optimal utilization levels during the ramp-up phase. To mitigate rising energy costs, GRP is investing in solar power, which is projected to yield savings of ₹30 million to ₹40 million annually starting in the second quarter of FY27. Management is also reassessing strategic options for its polyolefin subsidiaries as anticipated demand linked to regulatory benefits has not yet materialized.
GRP Maintains Strong Reclaimed Rubber Share
The global tyre industry faces significant pressure, with Original Equipment (OE) demand in North America reaching historically low levels. While industry-wide reclaim exports have remained flat, GRP expects a potential recovery in volumes following the recent announcement of a reduction in U.S. tariffs to 18%. The company is positioning itself to capitalize on global sustainability targets and India’s Extended Producer Responsibility (EPR) guidelines for tyres and plastic packaging, which are expected to drive long-term demand for recycled materials. GRP currently maintains a 20% share of the domestic market and a 35% share of the export market for reclaimed rubber.