JK Tyre & Industries Limited (NSE: JKTYRE) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Shri Anshuman Singhania — Managing Director
Arun K. Bajoria — Director & President, International
Sanjeev Aggarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Chirag Jain — Analyst
Abhishek Jain — Analyst
Mitul Shah — Analyst
Nandan Pradhan — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the JK Tire and Industries Limited Q1FY26 earnings conference call hosted by NK Global Financial Services Limited. 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Chirag Jain, Deputy Head of Research from MK Global. Thank you.
And over to you, sir.
Chirag Jain — Analyst
Thank you. Huda. Good afternoon everyone. On behalf of MK Global, I would like to welcome you all to the Q1FY26 earnings conference call of JK Tire and Industries Limited. Today we have with us the senior management team represented by Mr. Anshuman Singhania, Managing Director, Mr. Arun K. Bajoria, Director and President International and Mr. Sanjeev Agarwal, Chief Financial Officer. We will begin the call with opening comments from the management team followed by the Q and A session. Over to you, sir.
Shri Anshuman Singhania — Managing Director
Yeah. A very good afternoon to everyone. I welcome you all for the JKTIRE Q1 FY 26th earnings call. I’m happy to be here. And I have with me Dr. Arun Bajoureji, Director and President International and Mr. Sanjeev Agarwalji who is the CFO. India continues to remain a bright spot in the world struggling with growing uncertainty and trade related disruptions. The Indian economy has done incredibly well with the GDP growth of 7.4% in quarter four FY25. Taking the overall FY25 growth to 6.5% which is double the global average growth. Underscoring the country’s resilience on back of its robust macroeconomic strength.
As per RBI, the GDP is projected to grow at 6.5% in FY26. Growing private investments and increasing localization make in India are the key drivers fostering India into becoming a more meaningful part of the global supply chain. Lower interest rate and improved liquidity situation, declining crude oil prices and normal monsoons argue well for the growth going forward. However, global fluctuation due to US tariffs and geopolitical situation continue to pose challenges. India UK Free Trade Agreement has been recently signed. It is a breakthrough opportunity which is expected to align customer interest with border goals. Broader goals of Indian industry as it maintains a balanced approach to tariff commitments benefiting both India and UK manufacturing industry.
Recently announced US has imposed 50% tariff on the Indian imports in Q1 FY26 the performance of the auto industry was relatively flat. Growth in tractors, 23 wheeler and exports helped in holding the growth in the industry well. Domestic commercial vehicle volumes have remained flat and export has registered high growth of 23% on year. On year basis PV segment continues to perform well with an increased share of SUVs along with the overall PV sales. Crossing 1 million mark is encouraging and increasing the total pool of cars. With the upcoming festive season coupled with benefit of the recent Rapo rate cuts and favorable monsoon conditions, we expect the consumer sentiments to improve further.
In FY26. Indian tire industry is expected to achieve 7 to 8% growth on back of the strong domestic replacement demand despite muted OE offtakes, premarization continues to play a pivotal role in improving the realization. Indian tire industry is exporting heavy export heavy manufacturing sector with outbound shipping which surpasses rupees 25,000 crores in FY25 registering a growth of 10% on year on year basis. Despite global economic uncertainties. This growth is attributed to constant investment in capacity expansion, improvements in manufacturing efficiency and increased focus on enhancing the R and D capabilities. The Indian mobility landscape is witnessing a radical shift owing to emergence of artificial intelligence and machine learning which are regarded as the modern drivers of transformation.
J Guitar is embracing this technological shift by leveraging the use of advanced technologies at every stage of manufacturing and across functions helping us to deliver best in. Class products. With great pride. I would like to share with you that JP Tire is ranked amongst the top 15 strongest tires brands globally by brand finance. This recognition marks a significant endorsement of our global competitiveness, technological strength and brand leadership. Our core focus is to delivering products and solutions which offer a seamless blend of comfort and high performance of our customers. Recent expansions in PCR capacities have helped JK Tire to consolidate its position amongst the top PCR tire manufacturer in India. I’m happy to share that JK Tire is already moving well ahead on its sustainability path by achieving 70% reduction in GHG emission by 2025, much ahead of the original plan of 50% reduction by 2030.
In this quarter we deepened our market penetration and have onboarded 240 plus dealers and 35 exclusive shop across India. Also 40 plus new fleet accounts have been added nearly 1500 mark. Moving on to the financial of this quarter, JP Tire witnessed the best ever domestic performance. The domestic revenue grew in double digits with innovative and premium products. Digitalization and focus on enhancing operational efficiencies are some of the other key drivers which are helping the revenue growth Volumes in both commercial and passenger category achieved the highest sales in this quarter driven by strong brand building initiatives underscoring the enhanced customers trust in our product quality.
To further reinforce our brand credibility, we have launched targeted digital campaigns across the product categories achieving an impression of over 53 million consumers in the mobility space. 125 electric buses from Ashok Lane and switch were launched in Chennai and was flagged off by Tamil Nadu Chief Minister. We are proud that all these buses were equipped with our tyres juxe tubeless tires which reinforces our leadership in the EV segment. The momentum has been really good in this quarter. We are fully ready to build upon the same going forward and with all our effort and dedicated to serve the customers proactively while sustaining profitable growth benefiting all our stakeholders.
Now I would like to take you through some of the key operational highlights. Best Ever Performance of India Operation clocked quarterly revenue of rupees 3475 crores up by 9% on year on year basis as against 3188 crores in corresponding quarter. The growth momentum in the domestic market remained robust in the quarter one with JK Tire talking a sales growth of 11% on a year on year basis. Equally contributing by the OEM and the OE segment, TBR volumes in the replacement and OE market grew by 7% on. Year on year basis. Passenger line radial category registered a significant volume growth in the replacement market by 32% on year on year basis. Similarly, export volume also registered a robust growth of 39% on year on year basis. Farm category volume picked up pace with replacement and OE markets achieved a growth of 26% and 69%. Respectfully on a year on year basis, two three wheeler category volumes register a robust growth in OEM segment by 53% on year on year basis. Raw material and selling price on a quarter on quarter basis Raw material prices remained flattish whereas average net sales realization improved by 1.3% mainly through product mix improvement.
As a part of deleveraging journey we have been constantly reducing our debt level as on 30 June 25, gross debt on consolidated basis stands reduced by 324 crores. Projects under implementation involving a capex of Rs. 1400 crores are progressing as per schedule. CAPEX outlay for the full year stands at 902,000 crores. Now I would request Bajoria ji to talk about the performance of JK Thorndale.
Arun K. Bajoria — Director & President, International
Thank you MD sir. I’ll start by sharing some brief highlights of the Mexican economy followed by J.K. tornell’s performance for this quarter. Mexico is one of the largest trading partners of USA with 80% of its exports going into US. Given such huge exposure to US, the heightened volatility continues to remain an area of concern, but on the other hand around 50% of Mexican exports are USMCA, United States, Mexico Canada Agreement compliant which are projected to rise to 75% in 2026 attracting 0% tariff. Mexico’s central bank is also playing a crucial role in stabilizing the economy by easing the monetary cycle and it has lowered the policy rates tiie to 8.5% by the end of this quarter.
Further, local currency Mexican Peso has depreciated against US dollar by 13% year on year which was 19.5% in Q1 of FY26 versus 17.25 in Q1 of financial year 25 which bodes well for our future exports. Revenues of JK Tornell for Q1FY26 were recorded at Rupees five hundred and five crores, up 12% over previous quarter of Q4FY25 reflecting continued resilience of our products in domestic and export markets despite the ongoing uncertainties. Further, revenues in constant currency stood at 1147 million pesos up by 7% quarter on quarter versus 1234 million pesos in Q1 of FY25, lower by 7%.
To further strengthen our product portfolio and enhance customer base, we have started the development of ATV which is All Terrain Vehicle Tires, a profitable business in usa. In addition to above, we are foreseeing a revival of sales in the US markets on account of clarity with respect to the non applicability and further postponement of tariffs on tire exports from Mexico to about 90 days as of now. Further, we are fully ready to capture a potential opportunity in passenger and light truck market on account of closure of competing tire company’s Mexican plant. Now I would request Mr.
Sanjeev Agarwal, our CFO to talk about the financial performance of JK Tire for the first quarter of FY26.
Sanjeev Aggarwal — Chief Financial Officer
Thank you very much sir. I will briefly share the key highlights for Q1FY26. The first one is Consolidated Revenue for Q1FY26 was recorded at Rupees 3891 crore which is up by 6% on yy basis as against Rupees 3655 crore in the corresponding quarter. Consolidated EBITDA for Q1FY26 was recorded At Rs. 444 crore versus 516 crore in the corresponding quarter last year. However, over the previous quarter, EBITDA improvement improved by about 10%. EBITDA margins during Q1 were recorded at 10.9% versus 10.2% in the previous quarter. Cash profit for Q1 stood at rupees 309 crore up by 17% on Q on Q basis.
Profit after tax for the quarter stood at rupees 155 crore. Capacity utilization for Q1 was nearly 80% on consolidated basis. However, the utilization of radial capacities remained over 85%. Exports remained resilient during Q1 despite the ongoing US tariff related uncertainties and other geographical challenges. Geopolitical challenges however, exports of passenger car tires witnessed a strong traction on both year on year basis and on Q on Q basis. Cavendish Industries Limited posted a top line of Rupees 800 crore in Q1 and recorded an EBITDA of Rupees 51 crore in the quarter. Both the subsidiaries Cavendish Industries and JK Tornall Mexico continue to add significantly to the overall financials.
The company consolidated earnings per share nearly doubled at Rs. 6.03 per share in Q1 as against Rs 3.54 in the previous quarter. Return ratios ROCE and ROE continue to remain at high levels and net Debt stood at Rs. 3,862 crore for the quarter as against Rupees 4,081 crore in the previous quarter. A net reduction of 219 crore on net basis. The balance sheet of the company continues to remain healthy with robust key financial ratios, leverage ratios that is Net debt to equity and net debt to EBITDA were 0.74x and 2.4x as on 30th of June respectively.
The scheme of amalgamation of Cavendish with JK Tire is progressing well and has already been approved by stock exchanges and Sebi and shareholders and creditors meetings have been convened by NCLT which are scheduled to happen on 3rd of September this year. So we have already circulated the earnings presentation and which is available on our website and on the website of stock exchanges so we can open the forum for question and answers. Please. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone 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 Abhishek Jain from Alpha Acquired Advisors. Please go ahead.
Abhishek Jain
Thanks for opportunity and comrade for the decent set of numbers. Sir, in this quarter we have seen that margin has improved basically driven by the standalone numbers. So how the margin trajectory will improve in the coming quarter given that there is a fall in the rubber prices in last couple of months. If you can give some guidelines.
Shri Anshuman Singhania
So there has been a margin improvement versus the previous quarter. And here with our new and innovative products which are very well received in the market are gaining traction for OEM approvals and plus in the higher rim sizes in the PCR are driving good margin expansion. And as well as our in the replacement market as well we have in the replacement market in the passenger we were up year on year in terms of the numbers 32% and that is in the passenger car line and even in the truck bus radial we were high single digit on a year on year basis.
So this is giving us confidence that going forward this will definitely have a good traction because as you heard that the rapport has cut, there has been good monsoon and the thrust on the infrastructure push by government is coming in very clearly. So this all argues well for the demand generation.
Abhishek Jain
The gross margin extension of first quarter for 26 was around 120 bits quarter and quarter. So how the numbers were reflecting up from second quarter onwards, that’s as most of the tire companies are expecting that benefit of the fall in river prices will accrue from the second quarter significantly. So if you can give some guideline on the gross margin front.
Sanjeev Aggarwal
Yes, you are right. So as we mentioned earlier, the raw material price scenario is likely to remain benign and if that is the case then definitely we will be able to indeed demand increasing scenario. We will be able to increase our prices which will be supported as Anshomanji mentioned that increased product, improved product mix and increased volumes. Because as you are aware we have already been implementing projects in pcr, TBR and all steel LTR tires which are accretive products and this will definitely help us in improving the margins going forward. The NSR improvement will happen and we are expecting that hopefully if the raw material prices remain within what we are expecting, we will be able to come back to the guidelines which we have been talking about for the margins range of margins on a beta level.
Abhishek Jain
Okay. And my next question on the Mexico business rupee versus Mexico peso average election was 4.28 in this quarter. While it has now this exchange rate has moved to the 4.7 in the last two, three months. So how do you see benefit of it?
Arun K. Bajoria
You see the benefit will definitely occur when we convert the peso to rupees while consolidating the profit and loss and the balance sheet in India. So certainly you are right, it is. Going to benefit US.
Shri Anshuman Singhania
Export.
Sanjeev Aggarwal
This will be because there is a depreciation of the peso. So that will help us in exporting more. And in any case you have heard in these opening remarks by Anshumanji that there is a nil tariff which has been imposed on the exports from Mexico to US markets. So we will have the opportunities to actually and we will increase our exports to North America as well as to other countries, other
Arun K. Bajoria
Brazil and Latin and Latin America.
Sanjeev Aggarwal
So we are hoping that in addition to the increased domestic demand, the exports will also help us in improving the volumes and improving the margins.
Abhishek Jain
So this quarter, despite the top line growth margin turned negative in Mexico. So how do, how can we see the numbers in the coming quarter in terms of the top line growth and plus that margin improvement? Because this is the first time when we are seeing the negative margin in the Mexico business.
Arun K. Bajoria
Yeah, as you had heard our managing director say about the disruption in the Mexican market and all the industries because of the tariffs which the tariff was going on, the tariff war and all that was going on and they shifted from February to March and then again they shifted till the end of July and now in August they have shifted by another 90 days. So now we are feeling that it is settling down and therefore our sales will go up and therefore our bottom line is going to improve. And just to give you an some kind of sense of comfort, July has been a very, very good year in the top line as well as in the bottom line.
Sanjeev Aggarwal
And also one thing — just to complete that part, hello, can you hear me?
Abhishek Jain
Yes.
Sanjeev Aggarwal
Okay, so in the first quarter there was in constant, on constant currency basis there was an increase in revenue by about 7% and overall when the pieces depreciated. So that has also helped US Visa with the rupee on consolidation basis. So the revenue has gone up by 12%. So this is going to be the case going forward as the uncertainties are not there now. And we can increase our, we can focus on inflation, increasing our exports from the Mexico market.
Abhishek Jain
But that means that margin of this business which is used to be 7, 8% that that will come back in the coming quarter.
Sanjeev Aggarwal
Yes, absolutely, you’re right.
Abhishek Jain
Okay sir, and my last question on the calendar. So how, how what was the revenue and ebit of Candice in first quarter?
Sanjeev Aggarwal
So the revenues are slightly lower because of again we saw some kind of a slow demand for the TBR from OEM side on that front. But I think now the replacement market of course has helped us to pick up the volumes. And the EBITDA margin was suffered lower because of this reason. Only lower revenue. But I think now we will come back to almost about thousand to eleven hundred crore of average revenue for the quarter. And this will then allocate expenses over the larger number. And therefore the margin will go back to the same levels as we have seen in the case of JK tax on standalone basis.
Abhishek Jain
Thank you sir. That’s all for myself.
operator
Thank you. The next question is from the line of Mithul Shah from Dam Capital. Please go ahead sir.
Unidentified Participant
Thank you for the opportunity and congratulations on a good standalone performance. So my first question is on the Mexico operation. Whereas previous participant also asked about the losses for the first time after a long time and we are indicating normalized profit in next one or two quarters. So which area you think would be the progress in terms of either the raw material side will get benefited or operating leverage or any other cost cutting thing bringing down the promotional expense incentive which are the areas you see scope of improvement on a sequential basis going forward.
Shri Anshuman Singhania
The raw material will certainly help. We are seeing stability in the raw material index in the prices. So raw material will definitely help the other also. We have also expanded our markets within continuous expansion of the market within Mexico and our export market which is Brazil and Latam. We are continuously engaging and expanding our dealer and channel here. That will definitely help also that we have also introduced our constant introduction of new ranges. We have introduced all terrain vehicle tires which are also highly profitable. So these are some of the areas in which our margin expansion will come.
And it is a continuous process of operational efficiency which we are continuously focused on. And the volume, volume gain with premiumization is going to definitely going forward is going to be helping us. And our plan of $27 million is also on track which is adding capacity in the passenger car and that too in the premium. Category. So that will further improve the margins.
Unidentified Participant
Yes. So Q2 itself will see the similar margins which you used to report earlier. Or it will take 2, 3/4 to come to normalized level for next year.
Sanjeev Aggarwal
We will come back to the normal levels of margins in Q2 onwards. Because see up to last quarter in Q1 there was a efficiency of exports and the revenues and therefore the allocation of the expenses was not. We were not able to do it properly. So that will happen from now onwards.
Unidentified Participant
Out of this 5 billion revenue for Mexico imported, how much would be sir, purely US dependence. How much non US part.
Sanjeev Aggarwal
So presently about 7 to 8% exports are there to North America from Mexico. And that is going to go up because of the benefits of the known tariff regime is going to continue for another about 90 days. And subsequently also I think this is going to continue under the US MC.
Unidentified Participant
Last question on the domestic business side. In replacement Q2, do you see replacement growth would be higher than the OEM for the industry? And if yes, then within replacement which segment should perform or outperform in terms of higher growth and which segment would be flattish or maybe decline also or lower growth?
Shri Anshuman Singhania
So in the Q2 there is definitely an element of the festive season which argues well. So here in the passenger line radial Y and Y basis we in the replacement market 32% higher in terms of the volumes in the passenger line radial and in the truck radial we were high single digit and we are definitely. And in the farm we were high of 26% on Y and Y basis. So as we go along we see a good growth coming in in the replacement market. Even in the 2C wheeler it signals well that it is on a high single digit as well.
So on a whole we see that the replacement market will grow steadily as we go along. In the quarter the OEM has remained flattish. But there is definitely sentiments in terms of the festive season with some new launches in the Pascar the sentiments are good. So it should have a growth. And in the commercial trucks there is a little bit of a flattish movement now. But going forward there should be some pickup which should come the post monsoons.
Unidentified Participant
Thanks. Thanks and all the best.
operator
Thank you. The next question is from the line of Aditya Shah from Omkara Capital. Please go ahead.
Unidentified Participant
Hello. Hello. Am I audible?
operator
Please continue.
Unidentified Participant
I wanted to understand how is your in Indian market revenue mix? And what about the category mix for India in this quarter.
Shri Anshuman Singhania
Revenue mix has been 63% in the replacement market, 25% in the OEM and export was about 13%.
Unidentified Participant
Okay, and how was the category mix.
Shri Anshuman Singhania
In in terms of our total truck it is around 60% and around 30% is a passenger car radio line and non truck bias which is like the LCVs and farm has been around 12%. Hello.
operator
Are you there sir?
Unidentified Participant
Thank you sir. Thank you.
operator
Thank you. The next question is from the line of Nilesh who is an individual in West Doc. Please go ahead.
Unidentified Participant
Hello.
Sanjeev Aggarwal
Yes, please.
Unidentified Participant
Good set of numbers, sir. Congratulations. On the sequential basis there is improvement in margin. But sir, whether we Are what is the percentage of our premier Premiere premier products versus regular one. So that will give you going ahead the margin expansion.
Shri Anshuman Singhania
Yeah. So privy when we are talking about that in the passenger car radial 16 inch and above in FY23 we were 18% and now we are trading at 26% and our capacities are also coming in in the passenger car. So we are planning to increase this 25% mix to around 40% in the coming quarters. So that is one the other in the truck tires, our XF series which is gained very well acceptance in the OEM and as well as is gaining lot of traction in the replacement market. Even the XD and XM tire series which are our premium truck radial offering which is gaining a lot of traction there.
So these are the products in which we are having a good drive of sales which will ultimately improve the profitability.
Unidentified Participant
Going further whether JK Tire has any internal target to be a net debit free in next three years or five years.
Sanjeev Aggarwal
So basically this is a capital intensive industry as you are aware. And we have been constantly reducing our overall debt. But at the same time in order to grow we have to increase our capacities as well. Right. And therefore we have to keep implementing projects and with code based I think going forward we will be able to increase our margins and increase our profitability. So the larger amount of the projects going forward will be funded through our internal accruals rather than through loan. But that is the reason why I’ve been saying that the overall debt to EBITDA should remain within a range of about 1.5 to 1.8x rather than having 4x or which used to be the case earlier about 3, 4 years ago.
So now we are targeting to remain less than I would say less than 2 is to 2x. So that is a very comfortable way. And we should take the benefit of the interest rates which are prevalent in India in order to get a better profitability also. So debt is not bad always if it is well managed.
Shri Anshuman Singhania
I like to only add that we are very much focusing on deleveraging and we have been able to significantly reduce. The net debt at a peak level. In FY20 from Rupees 5,400 to 3,800 crores as of now. So this is a continuous process and we have also cash over 600 crores in our books which will be utilized for capacity enhancements.
Unidentified Participant
Okay sir, thank you. And all the best for the subsequent quarters. Yeah, thank you. Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to Ask a question. The next question is from the line of Nandan Pradhan from MK Global. Please go ahead.
Nandan Pradhan
Okay. Yes sir. Hello sir. Good afternoon and congratulations on a great set of results. So just two questions from my side because we’ve seen the RM being flattish this quarter. If you could just quantify the kind of price hikes that we’ve been able to take because we mentioned better realizations, also better products and suggestions first of the price hikes and the second question was in our Q4 result we had called out for double digit revenue console revenue growth for the full year largely led by the replacement. So if you could just shed some color on what kind of growth we are expecting for the full year and replacement as well as OEMs or if you could break it down into further subcategories that will be optimizing.
Thank you.
Shri Anshuman Singhania
Yeah. So the RM prices have has actually declined into 2.5% on a quarter on quarter basis. But there has been a flattish net sales realization which is the price increase on a quarter on quarter basis. Our growth of 11% has in the domestic market basically it is the volume push which is helped and we continue to do that both in the OEM and in the replacement market which has really helped us and we continue to focus on, on that. And what was full year guidance is asking and the full year, the full year we see a good growth coming in and this, the growth is going to be better than last year as you know that we were.
It was an election year and then lot of infrastructure projects etc were stalled. CV market was rather muted. So with the auto industry also having a good traction we are seeing for ourselves an initial double digit growth.
Nandan Pradhan
Thank you sir. And just squeeze in the last question. We had mentioned that the 1400 crores of capex was possibly going to be over by December. Do we still stand on that or do we see some kind of delay with the capacities come on stream very well.
Sanjeev Aggarwal
So this is progressing very well and as per schedule and from the third quarter of this financial year we will be starting and these projects and then of course ramp up will happen over the next six months period. So the projects are on. We have been investing money into these projects and that is how we are seeing that the volumes will increase going forward and we will get the benefit of the operating leverages.
Nandan Pradhan
Thank you so much.
Sanjeev Aggarwal
Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. Ladies and gentlemen, let us give a moment till the queue assembles as there are no further questions from the participants. I now hand the conference over to the management for the closing comments.
Sanjeev Aggarwal
Thank you very much to all of you for joining this call. And we look forward to meet you next quarter. Thank you so much.
Shri Anshuman Singhania
Thank you. All the best.
operator
Thank you. On behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.