BKT Lines Up ₹1,800 Crore Capex for FY27 to Scale Tyre, Carbon Black Capacity

Balkrishna Industries Ltd (BKT) plans to incur capital expenditure of ₹1,500-1,800 crore in FY27, along with around ₹200 crore towards maintenance capex, as the tyre maker expands capacity across its off-highway, on-highway and carbon black businesses.

The company incurred capex of around ₹2,800 crore in FY26. Its cumulative capex plan till FY29 stands at ₹6,800 crore, of which nearly ₹3,000 crore has already been spent. The balance ₹3,800 crore is expected to be deployed over the next few years.

The board has also approved an additional capex of ₹2,000 crore. The investment will support capacity expansion and infrastructure development across both off-highway tyres and on-highway tyre categories, AI-enabled automation in the on-highway tyre business and sustainability initiatives.

“This spend is intended to drive long-term cost efficiency, enhance operational resilience, improve sustainable performance and create a scalable platform for future growth,” Rajiv Poddar, Joint Managing Director of the company, said during the post-earnings analyst call.

Capacity Expansion Across Businesses

BKT’s expansion is spread across three broad areas: its core off-highway tyre business, its newer on-highway tyre push and its backward-integrated carbon black business.

In carbon black, the company commissioned a new line at Bhuj in December 2025, taking available capacity to 2,65,000 MTPA. It also increased captive power plant capacity at Bhuj from 40 MW to 64 MW in February 2026. The second phase of the carbon black expansion, which will take capacity from 2,65,000 MTPA to 3,60,000 MTPA, is expected to come on stream in Q1FY27.

BKT’s carbon black business recorded marginal year-on-year revenue growth in FY26, with third-party sales contributing 9% to overall revenue, Poddar said, adding that the newly commissioned carbon black line has reached full utilisation, supported by both captive consumption and external sales. 

The company has also secured approvals for select speciality carbon black grades across plastics, pressure pipes, power cables and inks.

BKT is also scaling up its on-highway tyre business in India. In February 2026, the company completed Phase 1 of its commercial vehicle radial tyre project with a capex of ₹750 crore, adding fungible capacity of 800 tyres per day. Phase 2 is expected to take total TBR capacity to about 3,800 tyres per day.

The TBR business has commenced, though its contribution is expected to remain modest in the initial phase. Management said the segment is likely to see limited impact in the first quarter before gaining scale through the rest of FY27.

BKT has also relaunched select two-wheeler tyres for the domestic market. Current capacity stands at around 1,00,000 tyres per month and can be scaled up depending on market response.

The company plans to launch passenger car radial tyres by the end of the current calendar year. The first phase of the PCR project is expected to provide a capacity of around 6,700 tyres per day.

BKT said it is taking a phased and calibrated approach to the on-highway business, with an initial focus on India’s replacement market. The company has completed primary distribution for the newer categories and will add dealerships in line with sales ramp-up.

On-Highway Business Seen as Growth Adjacency

BKT, traditionally known for its off-highway tyre business, sees on-highway tyres as a strategic adjacency that can widen its growth base.

“We have entered the truck-bus radial segment with new product launches in February 26. This segment is aligned with infrastructure growth, increasing radialization trends, thereby helping us to tap the replacement market opportunities that lie for us,” Poddar said.

The company has set a target of ₹5,000 crore revenue from on-highway tyres by FY30. As per its investor presentation, BKT expects on-highway tyres to contribute around 20% of revenue by FY30 and aims to achieve around 5% market share in the segment.

BKT is also not planning a discount-led entry in passenger car radials. The company said its premium positioning means it will price products in line with market leaders.

OHT Remains Core Growth Engine

The off-highway tyre business will remain BKT’s mainstay even as it expands into adjacent categories. The company expects OHT to contribute around 70% of revenue by FY30. It is targeting 8% global market share in the OHT segment, while a 10% global share remains a longer-term strategic goal to be pursued through phased investments.

BKT’s ongoing OHT capex of 35,000 MTPA, along with debottlenecking efforts, is expected to increase off-highway tyre capacity to 4,25,000 MTPA. The company said it will continue to focus on agriculture tyres, mining tyres, tracks, industrial and construction tyres.

BKT is targeting revenue of around ₹23,000 crore by FY30, implying 2.2 times growth from about ₹10,600 crore in FY25. The company expects this to be driven by OHT growth, higher third-party carbon black sales and scaling up of the on-highway tyre business.

The company also expects blended margins after full commercialisation to remain in the 23-25% range, supported by higher revenue, better product mix, carbon black integration and operating efficiencies.