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Tyre Industry Faces FY27 Headwinds Despite Strong Demand
17 Jul
Summary
- FY27 outlook positive despite raw material price volatility.
- JK Tyre reports record FY26 earnings amidst challenging conditions.
- Company investing ₹4,980 crore in capacity expansion by FY30.
The Indian tyre industry is poised for robust demand in FY27, yet faces significant challenges including volatile raw material prices, geopolitical uncertainties, supply chain disruptions, and high logistics costs. Despite these headwinds, JK Tyre & Industries' Chairman and Managing Director, Dr. Raghupati Singhania, expressed optimism, citing infrastructure-led growth and steady freight movement as key drivers.
In FY26, JK Tyre achieved its highest-ever consolidated revenue of ₹16,384 crore, alongside an EBITDA of ₹2,089 crore and a profit after tax of ₹774 crore. This performance was attributed to strong volume growth in the OEM sector, a resilient replacement market, premium product offerings, and stringent cost optimization measures.
To further strengthen its position, JK Tyre is undertaking a phased brownfield investment of ₹4,980 crore. This expansion, primarily for truck, bus radial, and passenger car radial capacities, is projected to increase overall capacity by approximately 24% by FY30, aiming to cater to both domestic and increasing export demands.
Looking ahead, demand in the passenger vehicle segment is expected to grow with a trend towards premium models, while commercial vehicle tyre demand will closely follow infrastructure development and economic expansion. The replacement market is anticipated to remain a crucial stabiliser and growth engine for the industry.
