BKT to Raise Prices in May, More Action If Input Cost Pressure Persists

Balkrishna Industries Ltd (BKT) is lining up another price hike in May and may take further increases if input costs remain elevated, a senior company official said. Rising raw material prices, higher freight costs and West Asia-linked supply-chain disruptions have put pressure on the tyre maker’s margin in the March quarter.

“We have taken price hikes of between 3% to 5% already across various geographies and we are targeting round two… towards the end of this month. And we will continue to watch this and maybe we may have to take further price hikes,” Rajiv Poddar, Joint Managing Director of the company, said during the post-earnings analyst call.

The company management said raw material prices rose about 4-5% sequentially in Q4FY26 and could rise another 7-8% in Q1FY27. It also expects freight costs to rise if geopolitical disruptions continue. In the March quarter, the company’s freight cost stood at around 4.5-5% of revenue in Q4FY26.

The pressure on BKT comes as tyre makers face a broader inflationary cycle in key inputs such as natural rubber, synthetic rubber, carbon black and crude-linked chemicals. Global tyre major Continental expects a hit of at least €100 million from the Iran war from the second quarter, as surging oil prices push up costs of raw materials used in tyre production.

Among Indian tyre makers, CEAT has also flagged a steep increase in raw material costs. The company’s Managing Director and CEO Arnab Banerjee said raw material prices were only slightly higher in Q4 but are expected to rise sharply in Q1. “Our raw material prices in Q4 were slightly higher than Q3, but in Q1, they will shoot up to 15% plus. By the end of Q1, we may reach closer to 20%,” Banerjee said in an analyst call.

CEAT has also said price increases are becoming unavoidable, with the company taking hikes in the replacement market and planning further increases through May and June.

MRF’s latest quarterly numbers also reflect rising pressure on input costs. MRF’s raw material consumption rose 6% year-on-year to ₹4,945 crore in Q4FY26 from ₹4,680 crore a year earlier.

Q4 Profit Falls Despite Higher Volumes

BKT reported a 2% year-on-year rise in standalone revenue to ₹2,894 crore in Q4FY26, helped by higher off-highway tyre volumes. The company’s sales volume stood at 85,820 metric tonnes, up 5% from 82,062 metric tonnes in Q4FY25.

However, profitability declined as cost pressures and geopolitical disruptions weighed on margins. Standalone EBITDA fell 6% year-on-year to ₹663 crore, and EBITDA margin narrowed by 187 basis points year-on-year to 22.9%. Net profit fell 19% to ₹295 crore from ₹362 crore in the year-ago period.

For FY26, BKT’s standalone revenue remained flat at ₹10,656 crore. EBITDA declined 10% to ₹2,423 crore, while net profit fell 25% to ₹1,222 crore. EBITDA margin stood at 22.7%, down 252 basis points year-on-year. OHT volumes for the year stood at 3,17,356 metric tonnes, up 1%.

OHT Remains Core, India Outperforms

BKT’s off-highway tyre business remained the mainstay of operations, contributing around 91% of overall revenue in FY26. Carbon black contributed the balance 9%.

Within OHT, agriculture tyres accounted for 58.8% of sales volumes, followed by OTR tyres at 37.5% and others at 3.7%. Channel-wise, replacement accounted for 70.1% of sales, OEMs contributed 28.7%, while others made up 1.2%.

Geographically, Europe remained the largest market with a 40% share, followed by India at 36.3%, the Americas at 13.2% and the rest of the world at 10.5%.

The company said Europe saw a good recovery in the second half of FY26 over the first half, helped by easing channel inventories. The Americas also showed improving traction, supported by higher channel activity. India, however, continued to outperform other markets and maintained sustained momentum.

“India continues to outperform all markets and witness sustained momentum. We are cautiously optimistic for the geography given the weather forecast of IMD for the upcoming monsoon season,” Poddar said.

On-highway Tyres to Widen Growth Base

BKT is also widening its business beyond off-highway tyres. The company entered the truck-bus radial segment with product launches in February 2026 and relaunched select two-wheeler tyres for the domestic market.

“We have entered the truck-bus radial segment... This segment is aligned with infrastructure growth and increasing radialization trends, thereby helping us tap replacement market opportunities,” Poddar said.

The company plans to introduce passenger car radial tyres by the end of the current calendar year in a phased manner. It sees on-highway tyres as an adjacent business that can complement its existing strengths.

At the same time, BKT said it is not looking to enter these categories through deep discounting. Management said its PCR positioning will be in line with market leaders.

Despite near-term cost pressure and investments in newer segments such as truck-bus radial, passenger car radial and two-wheeler tyres, BKT is maintaining its long-term profitability ambition.

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

The company has also approved additional capital expenditure of ₹2,000 crore to support capacity expansion and infrastructure development across OHT and on-highway tyre categories, AI-enabled automation and sustainability initiatives. For FY27, capex is expected to be around ₹1,500-1,800 crore.