Balkrishna Industries Limited (BKT) conducted a business update call on October 22, 2026, to discuss a strategic partnership with Pirelli. The call was moderated by SGA, Investor Relations Advisors, with participation from management including Mr. Rajiv Poddar (Joint Managing Director), Mr. Satish Sharma (Senior President and Director, Strategy and Business Development), and Mr. Saroj Khuntia (CFO).

Key Agreement Details

  • Parties Involved: Balkrishna Industries Limited and Pirelli
  • Agreement Type: Strategic offtake agreement
  • Product: Pirelli-branded premium car tires
  • Production Location: BKT's newly-constructed PCR plant at Bhuj, Gujarat
  • Technology: Pirelli-specific technology and quality standards
  • Commencement: Calendar year 2027
  • Scale Target: 800,000 tires per year by calendar year 2030
  • Market Focus: Primarily Indian market, with some potential for global markets
  • Tire Sizes: 17-inch and above premium segment

Capacity and Investment Details

  • The agreement utilizes BKT's existing PCR capacity of 6,700 tires per day at Bhuj
  • No additional capital expenditure required for the offtake agreement
  • The Bhuj plant infrastructure can expand capacity modularly as needed
  • Production assumed at 350-355 days annually
  • Approximately 80% of Phase 1 capacity will be for BKT-branded tires, 20% for Pirelli offtake

Financial Arrangements

  • Pricing based on raw material actuals plus conversion cost for domestic supplies
  • No royalty payments involved in the agreement
  • BKT will use its own carbon black for Pirelli tires, creating internal synergy
  • Financial impact not quantified in the disclosure

Future Joint Venture Potential

The agreement includes a second phase envisaging:

  • 50-50 joint venture between BKT and Pirelli
  • Construction of a dedicated production plant for high-value passenger car tires
  • Production of both Pirelli and BKT brands for India and international markets
  • JV subject to preset conditions being met by both parties
  • Deadline for JV announcement is 2030

Strategic Rationale

  • Validates BKT's manufacturing capabilities and quality standards
  • Accelerates BKT's entry into the passenger car tire segment
  • Provides access to Pirelli's testing and simulation infrastructure through a separate service agreement
  • Expected to improve BKT's brand reception and distribution channel access
  • Supports BKT's Vision 2030 without changing the target of 20% revenue from non-OHT segments

Market Context

  • Indian passenger car market growing at 6-7% annually
  • Premium car segment expected to grow faster than overall market
  • Pirelli currently imports tires for Indian market, which will be substituted by domestic production
  • BKT will address the full portfolio of Indian market (13-inch upwards) with its own brand

Management Commentary

  • The partnership combines Pirelli's technological prowess with BKT's industrial capabilities
  • BKT will maintain its own technology and IP for BKT-branded products
  • No technology transfer or IP sharing between the companies
  • The association expected to create intangible benefits through brand association and manufacturing learnings
  • Minimum offtake commitments are confidential and not disclosed