Balkrishna Industries Q2 FY27 Revenue Up 49% YoY

Tire Sales Volume: 185,167 metric tons.
Revenue: INR 6,859 crores, registering a growth of 35% year-on-year. This includes a realized loss on foreign exchange pertaining to sales of INR 76 crores.
EBITDA: INR 1,332 crores, with a margin of 19.42%.
Profit After Tax (PAT): INR 723 crores.
Capex Spend: Approximately INR 1,850 crores.

Revenue: INR 3,450 crores, registering a growth of 49% year-on-year. This includes a realized loss on foreign exchange pertaining to sales of INR 41 crores.
EBITDA: INR 629 crores, with a margin of 18.24%.
Profit After Tax (PAT): INR 291 crores.

The Board of Directors has recommended a second interim dividend of INR 4 per equity share.
This is in addition to the INR 4 per share paid for Q1 FY27.

Delivered good sales volume growth in Q2 FY27.
Europe: Faced challenges due to extreme weather conditions and related agricultural market pressures.
India: Continued to outperform with positive trends across all micro markets despite erratic monsoons. India's contribution increased to about 40% of overall volumes.
Americas: Witnessed stable sales.
Mining Tires: The All-Steel Radial mining range is finding increased acceptance in major global markets and is an emerging growth lever.

The TBR (Truck and Bus Radial) and 2-wheeler range of tires has gained strong acceptance from channels and end users.
The portfolio contributed a low single-digit percentage to the Q2 sales volume (part of the ~8,000 tons in "others").
The launch of PCR (Passenger Car Radial) tires is planned for January 2027.

Recorded decent revenue growth year-on-year in Q2 FY27.
Third-party sales constitute around 10% of the overall business.
The company is initiating a roadmap for accelerated product development towards higher-margin specialty blacks.

Announced a strategic offtake agreement with Pirelli for the production of Pirelli-branded premium car tires at the company's facility in Bhuj.
Phase 1: Production and sales are expected to start in the next calendar year (2027), with a target to ramp up sales volume to 8 lakh tires by 2030 (Year 4).
Phase 2 (Envisaged): At certain conditions, the creation of a 50-50 joint venture and the construction of a new production plant dedicated to high-value passenger car tires for both the Pirelli and BKT brands to serve India and international markets.

End markets were volatile due to the evolving geopolitical situation.
Profitability was impacted by headwinds from inflation in raw materials and freight costs. Management believes these headwinds will continue for the coming few quarters.
Price hikes of about 2%-3% were implemented, mainly in the Indian market, but cost inflation could not be fully passed through.
The company will use a "judicious mix of price and volume" as a tactical play to balance growth and profitability.
The long-term endeavor is to maintain an EBITDA margin between 20% and 25%.
The company is following its Vision 2030, targeting 5% market share and 20% of turnover from the on-road vertical by 2030.

Volume Run Rate: Management expressed an endeavor to sustain the strong volume run rate (~90,000+ metric tons per quarter) seen in H1 but did not provide specific forward-looking numbers.
Freight Costs: Were 6.5% of total sales value in Q2 and are expected to remain at elevated levels.
Working Capital: The significant outflow in H1 was attributed to the 35% revenue growth and supply chain disruptions, including inventory build-up for the upcoming EUDR regulation. Levels are expected to ease.
Debt Increase: The rise in gross debt is due to preponed capex investment to speed up project completion, which will be paid off through future earnings.
Other Expenses: The quarter-on-quarter decline was due to the one-time booking of promotion expenses for the Indian T20 league in Q1.
Channel Inventory: Was stated to be at normal levels across key markets.