JKTYRE — earnings call

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Prepared remarks

Moderator · Conference Operator

MR. RONAK MEHTA - ICICI SECURITIES LIMITED JK Tyre & Industries Limited February 09, 2026

Ladies and gentlemen, good day and welcome to JK Tyre & Industries Limited Q3FY'26

Questions and answers

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

Our first question comes from the line of Bharat Bhagnani from Living Root Analytics.

Please go ahead.

Bharat Bhagnani

Hello.

I want to understand what is the capacity utilization we are operating at and also if you can give some color on the mix of volume and pricing in the revenue growth this quarter?

Anshuman Singhania

Okay.

So, the capacity utilization has been at a level of 90% plus.

Can you please repeat the next question?

JK Tyre & Industries Limited February 09, 2026

Bharat Bhagnani

So, Anshuman ji, I am basically asking the growth that we have achieved 15%.

So, within this how much have we got in terms of volume growth and how much have we got in terms of pricing growth by taking a price hike?

Sanjeev Aggrawal

Majorly it is because of the volume growth with some price increases in certain selective SKUs only.

So, majorly it is because of the volume.

Anshuman Singhania

To add to this, domestic volume growth has been 16% with replacement volume growth at 11% and OE at 24% (except 2/3W volumes) and exports have grown by 9%, YoY.

Bharat Bhagnani

Right.

So, there is not much of pricing growth, right? and you have not taken any price hikes?

Anshuman Singhania

No, very minor, I believe.

Bharat Bhagnani

And given the raw material scenario we are at currently, where do you see margins for this year and the next quarter or next couple of quarters?

Sanjeev Aggrawal

Raw material basket is expected to remain rangebound as I said and it is expected to be inching up by 1 - 2% going ahead but the margins are going to be intact because there is a lot of volume push in this and our premiumization will also play a key role in the margin expansion.

Also, the higher capacity utilization will also play a role in that.

Bharat Bhagnani

And sir, final question.

You know, one of our competitors CEAT, they almost reported like a 25% growth on a similar base because the other companies have a higher base than us and we reported around 15%.

So, is the management targeting a higher revenue growth going forward?

Sanjeev Aggrawal

We are targeting a double-digit revenue growth and since you mentioned about the competition, particularly CEAT, please be aware that they have a larger base of 2/3W as well and also support from a recent acquisition.

Arun K. Bajoria

They acquired one Company Camso and that company has added to their overall revenues.

Bharat Bhagnani

Okay.

But we are targeting like, are we targeting in terms of the mid-double-digit, high-double- digit, low-double-digit in terms of revenue growth?

Anshuman Singhania

We are expecting a mid-double-digit growth, just as we have seen in this last quarter, if the momentum continues, which is expected to be more likely.

Bharat Bhagnani

Okay.

Thank you so much and all the best.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Aditya Akani from Shah Capital.

Please go ahead.

JK Tyre & Industries Limited February 09, 2026

Aditya Akani

Congratulations for a good set of numbers.

I want to understand the revenue mix on a standalone basis in terms of category and market.

Also, what was the percentage drop in the raw material cost on quarter-on-quarter?

Anshuman Singhania

On a quarter-on-quarter basis, the overall raw material basket from Q2 to Q3 was flattish and can you please repeat your next question?

Aditya Akani

My question was about the revenue mix on a standalone basis ?

Anshuman Singhania

Okay, Truck & Bus is 58%, Passenger car line is 27%, non-truck bias is 11% and remaining 4% is 2/3W.

Aditya Akani

Okay.

And in terms of market?

Anshuman Singhania

Market wise- Replacement is 63%, OEM is 26% and rest 11% is exports.

Aditya Akani

Okay.

Thank you.

Anshuman Singhania

Thank you.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Ronak Mehta from ICICI Securities Limited.

Please go ahead.

Ronak Mehta

Thanks for the opportunity and congratulations on good performance.

My first question is on your Mexico business.

So, what was the average realization in terms of Indian rupee versus Mexican peso for this quarter?

Now that rupee versus Mexican peso has moved over 5 in the last 2-3 months, which is, I think, positive for the Company.

So, we just wanted to understand on that benefit because of this.

Arun K. Bajoria

The net revenues has gone up by 21% on a year-on-year basis.

As I mentioned, from INR 507 crores in Q3FY25, it has gone up to INR 639 crores in Q3 this time.

Sanjeev Aggrawal

In constant currency terms, the revenues of JK Tornel has been flattish.

Ronak Mehta

Understood the entire benefit is from the rupee depreciation.

So, my second question is on the demand scenario.

So, now that GST benefit has already come through in the replacement segment, do you see that continuing even post the 4th Quarter?

Because most of the companies are guiding for double-digit growth for the 4th Quarter, but do you see that this demand sustaining in the replacement market even beyond the March quarter?

Anshuman Singhania

So, we are entering the Quarter 4, which is expected to be very strong, and we are very confident about the healthy growth coming across the sectors.

GST has definitely boosted the affordability, JK Tyre & Industries Limited February 09, 2026 but other macro tailwinds are supporting as well, which are rural demand, positive consumer sentiment, and lower interest rates which gives a very positive momentum to the demand.

And we see that continuing momentum into FY'27.

Ronak Mehta

Understood.

Okay.

So, one last question from my side.

Sir, you along with some of your peers across the industry have announced new CAPEX.

And the size of the CAPEX is large for everyone and most of the companies have been reporting almost 90% utilization level like you.

So, do you see a scenario that in the near term, say for next 12 months, where there is capacity constraint and the industry is looking to take price hike just because there is no capacity available.

So, pricing-wise, I think the scenario is favorable for the industry?

Anshuman Singhania

Look, everybody is announcing at the different capacity levels, capacity growth.

And as I told you, the domestic market is looking to be very buoyant in the coming year.

So, the appetite of commercial vehicles have come back after a long pause.

So, this will continue.

And plus, please note that domestic markets are one consumption point.

The other is the export market at large, which is a big consumption point for tyres.

And right now, as you know that the EU and US FTAs are almost getting finalized.

We are expecting that tyre should be given that importance and we will benefit from that for exports.

So, the capacities will be needed as we go forward because of the robust demand overall.

Ronak Mehta

No, sir.

So, my question was more from the pricing point of view.

So, given that the demand is pretty strong and the capacity is almost near peak utilization level, in case of a higher raw material pricing scenario, do you think that the price hikes could be much more easier this time given that recently because of GST there was a price cut and industry also does not have adequate capacity?

So, pricing wise, is it easier?

Do you think that it will be easier for you as well as other industry players to take price hikes in the near term?

Anshuman Singhania

Keeping in view the demand supply situation and the overall market dynamics, whatever necessary price revisions may have to be undertaken going ahead will be done.

Ronak Mehta

Understood.

Thank you, sir.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Abhishek Jain from Alfaccurate Advisors Private Limited.

Please go ahead.

Abhishek Jain

Thanks for the opportunity and congrats for a strong set of numbers.

Sir, my first question on that demand scenario on the Mexican business.

So, just wanted to understand how much the volume growth, YoY and on QoQ basis in Mexico and what are the levers for the business growth over there?

Anshuman Singhania

JK Tornel, Mexico on a year-on-year basis has seen a jump of 21% in revenues.

As we go along, we see a good traction coming in from Mexico itself because the economy is picking up there.

JK Tyre & Industries Limited February 09, 2026 The other thing is also that we are continuously exploring the US markets under the USMCA.

Right now, no duties have been announced, and we are taking advantage of that by exporting into the US.

Also, we see that Brazil and LATAM are also showing a steady demand.

Next, we are also finding newer spaces to increase our through-put in terms of volumes.

And as I told you that we are constantly increasing our foothold in Mexico, appointing dealers and higher volumes through mass merchandisers as well.

So, we are seeing a good throughput coming in from there.

Abhishek Jain

So, in Mexican business, how much is the contribution of the export right now?

Anshuman Singhania

It is nearly 40%.

Abhishek Jain

40% exports and 60% is the domestic ?

Anshuman Singhania

Yes, right.

Abhishek Jain

And sir, in the domestic market, there is also that the Mexican government has imposed duties on the many countries.

So, just wanted to understand what is the benefit to you because your plant is over there.

So, is there any benefit goes to you because of this?

Anshuman Singhania

Yes, the benefit is because we are having local production capacities there in Mexico, we get the benefit of a low-cost base and that's why we've been able to supply tyres into the local market and export as well.

So, yeah we do get that benefit.

Abhishek Jain

So, from here on, what kind of the growth we are looking in the domestic Mexican market and export market in Mexico business in the next one year?

Anshuman Singhania

We are looking at the mid-single digit growth.

Abhishek Jain

Okay.

Got it.

And how much margin expansion you're looking over there?

Anshuman Singhania

We are looking in the range of about 1% to 2%.

Abhishek Jain

Got it, sir.

That's all from my side.

Thank you.

Anshuman Singhania

Thank you.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Nandan Pradhan from Emkay Global Financial Services.

Please go ahead.

Nandan Pradhan

Hello.

Good afternoon to the team and thank you for taking my question.

Congratulations on a great set of numbers.

And I just had two questions.

One is the INR 14 billion CAPEX that was undergoing.

We had mentioned that it would come on stream from Q3 and I think PCR had JK Tyre & Industries Limited February 09, 2026 started from October.

So, I just wanted to know the status on that currently?

That's the first question.

Anshuman Singhania

So, our PCR expansion at Banmore is already under ramp up.

It is already completed and it’s going to attain its full capacity by July’26 and for TBR capacities at Laksar by April’26.

ASLTR expansion in Mysuru has already been completed.

Nandan Pradhan

Thank you, sir and my next question, we had also called out EBITDA margin guidance of 13% to 15%.

I think we are already towards the upper band and with Q4 RM basket seen going upwards of 1% to 2%, the impact of that would largely flow through in Q1FY‘27.

So, do we still stand by the guidance of 13% to 15%?

Anshuman Singhania

Yes, we will because there is a lot of robustness in terms of the OE demand and we are the largest in the truck and bus.

So, there we are seeing good throughput coming in and it is going to be sustained even in the FY’27.

And we also see a good traction in the passenger car line as well, where our premiumization is playing an important role in terms of margin expansion.

Last year the contribution of 16-inch & above PCR tyres in our mix was around 27% and today we are at nearly 31%.

So, that is also panning out for us.

And we are also expanding the capacities as I mentioned by INR 1,130 crores, where we are also undertaking more expansion in the passenger line, which will further enhance the higher rim size capacities.

Nandan Pradhan

Thank you for such a detailed answer.

So, just one last question.

We had spoken about a INR 50 billion CAPEX over a period of next five years.

So, this INR 1,130 Cr would essentially form a part of that plan, if I am not wrong?

Sanjeev Aggrawal

Yes, INR 1130 Cr is a part of that only and this will take somewhere between 1 - 2 years to complete this project.

Nandan Pradhan

Got it, sir.

Thank you for taking my question.

Thank you.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Kuber from Axis Securities.

Please go ahead.

Kuber

Congratulations, sir, for a good set of numbers.

Just two questions from my side.

First one is, what kind of demand traction we are witnessing in the verticals?

Is it more from trucks?

Is it more from passengers?

That is one question.

Or any other verticals?

And secondly, you said that 40% of the dependency is on Mexico.

So, are they going to reduce in near future?

Anshuman Singhania

No, that 40% is not the contribution of Tornel to overall revenues.

It is actually JK Tornel’s exports at 40% and rest 60% it sells domestically.

JK Tyre & Industries Limited February 09, 2026

Kuber

Okay.

And in terms of demand, where we are witnessing more traction and in next year as well, what we see in terms of demand?

Anshuman Singhania

We are witnessing a good demand across the segments.

There has been a sharp demand which is coming in from the OEM in the CVs, i.e. in the truck and bus segment.

As I said earlier that in FY’26, truck category is about to cross its FY’19 high numbers in terms of their sales.

And we see that continuous traction going forward in the next year.

We are also seeing a good traction coming in from passenger category.

Further, we are participating closely with the OEMs with new and exciting product launches in the passenger car segment.

We also see the same traction in the farm sector and as well as two-three wheeler on the back of rural income picking up.

Kuber

Okay.

Got it.

Thank you.

That’s it from my side.

Moderator · Conference Operator

Thank you.

Our next question comes from the line of Bharat Bhagnani from Living Root Analytics.

Please go ahead.

Bharat Bhagnani

I think this question is for Sanjeev ji, can you just explain the current tax and deferred tax calculation which is there and what is the tax rate for us?

Sanjeev Aggrawal

As you must be aware we are in the process of implementing certain expansion projects, therefore some kind of deferred tax increases every year, and this gives us the benefit in income tax to defer some amount w.r.t new projects.

But we are broadly under 25% tax bracket in the new regime.

So, 25% is the effective tax rate for us.

Bharat Bhagnani

Okay.

And in this particular quarter, how much is the effective tax rate that we have paid?

Sanjeev Aggrawal

That will be the same, except the fact that we were also carrying some brought forward losses in the books of Cavendish in income tax.

So, that some benefit might have come actually our way from CIL.

Bharat Bhagnani

Net tax rate, what is that in this quarter?

Sanjeev Aggrawal

Around 25%, that is the effective tax rate.

It will be divided between the deferred tax and actual tax payment and overall will remain 25%.

Bharat Bhagnani

And the exceptional items also you have given the note for that, so going forward the exceptional won’t come, right?

Sanjeev Aggrawal

So, there are three exceptional item in this note, one is the stamp duty, which is because of the merger activity and is One time.

The other one is foreign exchange losses, as you would know, there was a huge volatility during the quarter.

And this is also not the realized loss, this is mark- to-market partly.

And the third one is because of the labor codes, and it is also a one-time charge.

JK Tyre & Industries Limited February 09, 2026

Bharat Bhagnani

So, all of these are one time, I think, apart from foreign exchange.

Anshuman Singhania

Yes, these two major ones are one time charge.

And forex losses today could be forex gain tomorrow.

But this is mostly the mark-to-market one.

Bharat Bhagnani

Okay.

And Anshumanji, one final thing from my side, the rubber prices have gone up a bit.

So, till what level of rubber prices are we comfortable that we will be able to maintain the margins?

Anshuman Singhania

Rubber prices are inching up.

And as I said that our total raw material basket will be hovering by 1% to 2%.

So, that will not make much of an impact because there is a lot of volume push with enhanced capacity.

Utilization is also at its full.

Bharat Bhagnani

So, you are okay with these kinds of prices as well, right?

You are confident that you will be able to maintain margins?

Anshuman Singhania

We will plan accordingly in terms of the competitiveness of the market for any price revisions.

Bharat Bhagnani

Okay.

Thank you so much.

Thanks.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.

Sanjeev Aggarwal

Thank you so much for joining this conference call for Quarter 3.

And I hope we have given answers to all your questions satisfactorily.

Good day and thank you so much.

Anshuman Singhania

Thank you.

Arun K. Bajoria

Thank you.

Moderator · Conference Operator

Thank you.

On behalf of ICICI Securities Limited, that concludes this conference.

Thank you for joining us and you may now disconnect your lines.