BKT Expands Tyre Capacity With ₹2,000 Crore Additional Investment Across OHT and On-Highway Segments

Balkrishna Industries Ltd (BKT) is preparing a major investment cycle for FY27 with planned capital expenditure of ₹1,500-1,800 crore, alongside nearly ₹200 crore allocated for maintenance activities. The investment roadmap is aimed at expanding manufacturing capacity across its off-highway tyre operations, on-highway tyre business and carbon black segment. The company is also focusing on automation and infrastructure upgrades to strengthen operational efficiency and long-term scalability. BKT had already incurred nearly ₹2,800 crore in capex during FY26, while its cumulative investment commitment until FY29 now stands at approximately ₹6,800 crore.

The company stated that close to ₹3,000 crore from the planned outlay has already been deployed, with the remaining ₹3,800 crore expected to be invested over the coming years. In addition, BKT’s board has approved a fresh ₹2,000 crore capex programme to accelerate infrastructure development, sustainability initiatives and capacity enhancement across both off-highway and on-highway tyre categories. The investment also includes AI-enabled automation initiatives intended to improve manufacturing efficiency in the on-highway tyre business.

Rajiv Poddar, Joint Managing Director of the company, said the investment programme is focused on improving operational resilience and creating a scalable growth platform for the future. According to management, the capex strategy is expected to support long-term cost optimisation, strengthen sustainable operations and improve production flexibility as the company expands into newer tyre categories while retaining leadership in off-highway tyres.

Major Capacity Expansion Across BKT Businesses

BKT’s ongoing expansion programme spans three key verticals, including off-highway tyres, on-highway tyres and the backward-integrated carbon black business. The company commissioned a new carbon black production line at its Bhuj facility in December 2025, taking the available capacity to 2,65,000 MTPA. It also enhanced captive power generation capacity at the Bhuj plant from 40 MW to 64 MW during February 2026 to support rising manufacturing demand and improve energy reliability.

The second phase of the carbon black expansion project is expected to become operational during Q1FY27 and will increase production capacity from 2,65,000 MTPA to 3,60,000 MTPA. Management stated that the newly commissioned line has already achieved full utilisation levels, supported by internal consumption requirements and external third-party sales. During FY26, third-party carbon black sales contributed nearly 9% of total company revenue.

Key Capacity Expansion Projects Across Business Segments

The company has also received approvals for speciality carbon black grades used in applications such as plastics, pressure pipes, power cables and inks. These approvals are expected to support diversification of revenue streams and improve value-added product sales in industrial segments.

Expansion of On-Highway Tyre Business

India remains the primary market for BKT’s initial on-highway expansion strategy. The company completed Phase 1 of its commercial vehicle radial tyre project in February 2026 with an investment of ₹750 crore. This phase added a fungible manufacturing capacity of around 800 tyres per day. The second phase is expected to increase total truck and bus radial tyre capacity to nearly 3,800 tyres per day.

BKT stated that the truck and bus radial business has already commenced operations, although management expects only a limited revenue contribution during the initial quarters of FY27. The company expects stronger scaling momentum through the remainder of the financial year as distribution networks and dealership additions expand gradually across the replacement market.

The tyre manufacturer has also relaunched selected two-wheeler tyre products for the domestic market. Current production capability stands at nearly 1,00,000 tyres per month, with additional scalability available based on future market demand. Alongside this, BKT plans to introduce passenger car radial tyres by the end of the current calendar year.

The first phase of the passenger car radial tyre project is expected to provide manufacturing capacity of approximately 6,700 tyres per day. Management clarified that the company does not intend to enter the segment through aggressive discounting strategies. Instead, BKT plans to maintain premium product positioning and align pricing with established market leaders.

On-Highway Segment Expected to Drive Future Growth

BKT considers the on-highway tyre category a strategic growth adjacency capable of diversifying its revenue base beyond off-highway tyres. Management highlighted that the truck and bus radial segment aligns with infrastructure development trends and rising radialisation across commercial vehicle fleets, creating substantial opportunities within the replacement tyre market.

The company has established a revenue target of ₹5,000 crore from on-highway tyres by FY30. According to its investor presentation, BKT expects the segment to contribute around 20% of total revenue by FY30 while aiming to secure nearly 5% market share in the category. Distribution infrastructure for newer product categories has already been initiated, with dealership expansion expected to continue in line with sales growth.

Off-Highway Tyres Continue as Core Business

The off-highway tyre business will continue to remain the company’s primary growth engine despite expansion into adjacent segments. BKT expects off-highway tyres to contribute nearly 70% of total revenue by FY30. The company is targeting approximately 8% global market share in the segment, while its longer-term strategic objective remains achieving a 10% worldwide share through phased investment expansion.

Ongoing off-highway tyre capex of 35,000 MTPA, combined with debottlenecking initiatives, is expected to increase total off-highway tyre production capacity to 4,25,000 MTPA. The company plans to continue focusing on agriculture tyres, mining tyres, industrial tyres, tracks and construction tyre categories as part of its core portfolio expansion strategy.

BKT is targeting overall revenue of nearly ₹23,000 crore by FY30, representing more than double growth compared with approximately ₹10,600 crore recorded in FY25. The company expects future expansion to be supported by continued growth in off-highway tyres, higher contribution from third-party carbon black sales and gradual scaling of the on-highway tyre business. Management also expects blended margins after full commercialisation to remain within the 23-25% range, supported by better product mix, operational efficiencies and integrated carbon black operations.

Frequently Asked Questions

What is BKT’s planned capex for FY27?
BKT plans to invest between ₹1,500 crore and ₹1,800 crore in FY27, along with around ₹200 crore in maintenance capex. The investment will support capacity expansion across off-highway tyres, on-highway tyres and carbon black businesses. The company is also investing in AI-enabled automation and sustainability-focused infrastructure initiatives. These investments are part of BKT’s broader long-term capex strategy extending till FY29, where cumulative planned spending has reached approximately ₹6,800 crore to support future growth and operational efficiency improvements.

What are BKT’s growth targets for FY30?
BKT is targeting total revenue of around ₹23,000 crore by FY30, supported by expansion in off-highway tyres, carbon black operations and on-highway tyre categories. The company expects on-highway tyres to contribute nearly 20% of total revenue while off-highway tyres remain the core business with around 70% contribution. BKT also aims to achieve around 5% market share in on-highway tyres and approximately 8% global market share in off-highway tyres. Margin improvement is expected through operational efficiencies and higher-value product mix expansion.