Balkrishna Industries Plans Fresh Tyre Price Hikes Amid Rising Raw Material Costs

Balkrishna Industries is preparing another round of tyre price hikes as rising raw material expenses and elevated freight charges continue to pressure profitability. The company has already implemented price increases of 3-5% across several global markets and is evaluating additional hikes later this month if inflationary trends persist. Management indicated that escalating input costs, geopolitical supply-chain disruptions linked to West Asia and higher logistics expenses are impacting overall margins during the ongoing financial cycle.

Rajiv Poddar, Joint Managing Director of the company, stated during the post-earnings analyst interaction that the business remains focused on preserving profitability while responding to rising costs. According to the management, raw material prices increased around 4-5% sequentially during Q4FY26 and may rise another 7-8% in Q1FY27. Freight expenses are also expected to remain volatile if geopolitical tensions continue disrupting shipping routes and supply-chain operations globally.

Tyre Industry Faces Broad-Based Cost Inflation

The pressure on tyre manufacturers is not limited to BKT alone. The broader tyre industry is witnessing inflationary trends across key raw materials including natural rubber, synthetic rubber, carbon black and crude oil-linked chemicals. Global tyre companies are also dealing with increasing operational costs due to higher oil prices and geopolitical uncertainties affecting supply chains and transportation networks.

CEAT has also highlighted sharp increases in raw material prices during recent analyst discussions. The company’s management indicated that input costs could rise by more than 15% in the first quarter and potentially approach 20% by the end of Q1. The company has already implemented price hikes in the replacement market and plans additional increases during May and June to offset margin pressure caused by inflationary trends.

MRF also reported rising input cost pressure in its latest quarterly performance. The company’s raw material consumption increased 6% year-on-year to ₹4,945 crore in Q4FY26 from ₹4,680 crore in the corresponding period last year. Industry participants continue to monitor commodity prices closely as volatility in crude-linked inputs and logistics costs remains elevated.

BKT Q4FY26 Financial Performance

BKT reported a 2% year-on-year increase in standalone revenue to ₹2,894 crore during Q4FY26, supported by stronger off-highway tyre volumes. Sales volumes rose 5% to 85,820 metric tonnes compared to 82,062 metric tonnes in Q4FY25. Despite higher volumes, profitability declined due to increasing raw material expenses, elevated freight costs and geopolitical disruptions affecting supply-chain efficiency.

Standalone EBITDA declined 6% year-on-year to ₹663 crore, while EBITDA margin narrowed by 187 basis points to 22.9%. Net profit dropped 19% to ₹295 crore compared to ₹362 crore in the year-ago quarter. The company stated that sustained inflation in key inputs and higher logistics costs negatively impacted operating margins during the reporting period.

BKT FY26 Financial Overview

The following table highlights the company’s standalone financial performance for FY26 compared with the previous year.

Off-Highway Tyres Continue to Drive Revenue

Off-highway tyres remained the core contributor to BKT’s business operations during FY26, accounting for nearly 91% of total revenue, while carbon black contributed the remaining 9%. Within the off-highway tyre segment, agriculture tyres represented 58.8% of total sales volumes, followed by OTR tyres at 37.5% and other categories at 3.7%.

Replacement demand remained the dominant sales channel with a 70.1% share, while OEMs accounted for 28.7% of total sales. Geographically, Europe remained the largest market for the company with a 40% revenue contribution, followed by India at 36.3%, the Americas at 13.2% and the rest of the world at 10.5%.

The company stated that Europe witnessed improved recovery during the second half of FY26 due to easing channel inventories and improving distributor activity. The Americas also showed gradual traction improvement supported by stronger channel demand. India continued outperforming other regions, helped by sustained domestic demand momentum and positive agricultural sector expectations linked to the upcoming monsoon forecast.

BKT Expands Into On-Highway Tyre Segments

BKT is expanding beyond its traditional off-highway tyre business by entering additional on-highway categories. The company launched products in the truck-bus radial segment during February 2026 and also relaunched selected two-wheeler tyres for the domestic market. Management believes the truck-bus radial segment aligns with infrastructure development trends and increasing radialization in commercial vehicle markets.

The company is also planning a phased entry into the passenger car radial tyre segment before the end of the current calendar year. Management stated that the new categories are expected to complement existing strengths while broadening revenue opportunities across multiple tyre segments. However, the company clarified that it does not intend to pursue aggressive discounting strategies and plans to position its passenger car radial products alongside established market leaders.

Capex Expansion and Margin Outlook

Despite near-term margin pressure and continued investments into new tyre categories, BKT remains optimistic about its long-term profitability outlook. Management expects blended EBITDA margins to remain within the 23-25% range after full commercialisation of newer business segments. The company believes operational efficiencies, scale benefits, product mix improvements and carbon black integration will support future profitability.

BKT has approved an additional capital expenditure plan worth ₹2,000 crore to support manufacturing expansion, infrastructure development, AI-enabled automation initiatives and sustainability-focused projects across both off-highway and on-highway tyre businesses. For FY27, the company expects annual capex spending to remain between ₹1,500 crore and ₹1,800 crore.

Frequently Asked Questions

Why is Balkrishna Industries increasing tyre prices?
Balkrishna Industries is increasing tyre prices due to rising raw material and freight costs impacting profitability across its operations. The company stated that prices of natural rubber, synthetic rubber, carbon black and crude-linked chemicals have risen significantly in recent quarters. Additionally, geopolitical disruptions linked to West Asia have increased logistics and shipping expenses. Management indicated that the company has already implemented 3-5% price hikes in multiple markets and may introduce additional increases if inflationary pressure continues during Q1FY27.

Which new tyre segments is BKT entering?
BKT is expanding into multiple on-highway tyre categories to diversify its business beyond off-highway tyres. The company entered the truck-bus radial segment in February 2026 and also relaunched selected two-wheeler tyres for the domestic market. Additionally, BKT plans to launch passenger car radial tyres in a phased manner before the end of the current calendar year. Management believes these adjacent segments will help strengthen long-term growth opportunities while complementing its established off-highway tyre business.