Balkrishna Industries Ltd recorded its highest quarterly off-highway tyre sales volume in the first quarter of FY27. Demand increased across India, Europe and other international markets, lifting standalone revenue and profit. However, higher raw material and freight costs reduced the margin benefit, highlighting the pressures facing manufacturers as BKT undertakes a major capacity expansion programme.
BKT sold 93,770 tonnes of off-highway tyres during the quarter ending June 2026. This represented growth of 16% from the same period last year and set a quarterly company record.
Standalone revenue increased by 24% to INR 34.09 billion. Earnings before interest, tax, depreciation and amortisation rose to INR 7.03 billion, producing a margin of 20.61%. Profit after tax reached INR 4.32 billion.
The company’s core off-highway tyre operation continued to generate around 90% of total revenue. Replacement business represented the largest sales channel, while agricultural tyres remained the leading product category.
Rajiv Poddar, BKT’s Joint Managing Director, said the quarter began positively and delivered the company’s highest OHT sales volume. He added that the result was achieved despite difficult conditions across international markets and global supply chains.
India became BKT’s largest volume market during the period, contributing around 40% of sales. Europe accounted for a slightly smaller share, while the Americas and other markets completed the regional mix.
The change reflects a wider rise in Indian demand from agricultural, construction, mining and industrial applications. BKT estimates that it holds 18% to 19% of India’s off-highway tyre market.
Volume and revenue growth did not translate into an equivalent margin improvement. Raw material costs increased as geopolitical disruption affected international supply chains and commodity markets.
BKT introduced price increases averaging approximately 5% during the quarter. Management expects the full benefit to flow through during the second quarter because the changes were applied at different points in Q1.
However, the company also expects raw material costs to increase by around 5%. Management indicated that this could reduce margins by approximately two percentage points before further pricing or currency effects.
Freight costs currently represent about 5% of revenue. Vessel availability, container shortages and wider geopolitical tensions could increase that burden during subsequent quarters.
The company also identified European weather conditions and the strength of India’s monsoon as potential demand risks. These factors are particularly relevant to agricultural tyre sales.
BKT has invested approximately INR 38 billion under a wider INR 68 billion capital expenditure programme. Around INR 30 billion remains scheduled for deployment, with INR 15 billion to INR 20 billion expected during FY27.
The programme covers off-highway capacity, on-highway tyre production, carbon black manufacturing, power generation and supporting infrastructure.
BKT has commissioned the second phase of its carbon black operation at Bhuj. The INR 8 billion project takes annual capacity to 360,000 tonnes and strengthens the company’s control over a critical tyre material.
Captive power capacity has also risen from 40MW to 64MW following investment of INR 1.25 billion.
The projects build on BKT’s long-term manufacturing plans. Tyre News previously examined the company’s INR 35 billion expansion programme and off-highway growth plans.
Its enlarged carbon black operation also advances the vertical-integration programme covered in Tyre News reporting on BKT’s Bhuj carbon black capacity expansion.
Poddar said the remaining capital projects were progressing to schedule. Their delivery will be important as BKT balances OHT growth with entry into more competitive on-highway categories.
BKT began commercial supplies of truck and bus radial tyres during the quarter. It also introduced selected two-wheeler products after establishing an Indian distribution network.
Management did not disclose revenue or volume figures for the new operation. It expects a gradual sales increase from the second quarter as more products and dealers are added.
The company retains a target of INR 50 billion in annual on-highway tyre revenue by 2030. Satish Sharma, Senior President and Director of Strategy and Business Development, said FY27 would concentrate on portfolio expansion. More substantial growth is expected from FY28.
The launch follows the company’s previously announced plan to diversify beyond specialist tyres. Tyre News reported on BKT’s 2030 expansion into truck, bus and passenger radial tyres.
The move gives BKT access to larger domestic categories but introduces different competitive and margin dynamics. On-highway products generally face stronger price competition and shorter replacement cycles than specialist off-highway tyres.
BKT’s record quarter indicates that demand for agricultural, mining and industrial tyres remains resilient across several major markets. India’s increased contribution also reduces the company’s reliance on European demand.
However, the lower margin shows that volume growth alone may not offset rising input and logistics costs. Pricing discipline and the timing of capital projects will therefore remain central to performance during FY27.
The expansion into truck, bus and two-wheeler tyres adds a further variable. It may broaden BKT’s revenue base, but the commercial ramp-up will require distribution investment and careful product positioning.
Tagged with: BKT, Balkrishna Industries, off-highway tyres, OHT sales, agricultural tyres, OTR tyres, truck and bus radial tyres, carbon black, Bhuj manufacturing, tyre raw materials, freight costs, India tyre market
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