JK Tyre Unveils One Of Its Largest Capex Plans As Capacity Utilisation Crosses 90%

JK Tyre & Industries Ltd has announced one of its largest-ever capital expenditure plans, approving a Rs 4,980 crore phased expansion of its truck and passenger car radial tyre capacities amid strong demand across domestic and export markets.

The expansion, approved by the company’s board, will increase overall capacity by 24% over the next three years and will primarily focus on the Chennai and Mysore plants. The company currently has a combined TBR and PCR capacity of 2.1 crore tyres per annum.

The company has also outlined a capital outlay of around Rs 1,000 crore for FY27, including maintenance capex, as it prepares for the next phase of growth.

Speaking during the company’s post-earnings media interaction, Chairman and Managing Director Raghupati Singhania said existing plants were already operating at near full utilisation levels.

“Capacities are fully utilised across our segments, the figure being 95% utilisation factor across our plants,” Singhania said.

He added that the company had already undertaken an earlier Rs 1,130 crore expansion programme for passenger car radial (PCR), truck and bus radial (TBR) and all-steel truck radial tyres, which is expected to be commissioned by the third quarter of FY27.

“Looking at the momentum in growth and the likely demand pick-up, our board has approved today further expansion of PCR and TBR capacities with an outlay of nearly Rs 4,900 crores,” he said.

The expansion will be executed in three phases. The first phase, accounting for around 50% of the total investment, is expected to be commissioned by August 2028. The second phase, representing around 40% of the outlay, is targeted for April 2029, while the remaining capacity will come up by December 2029.

According to the company’s exchange filing, the projects will be funded through a mix of internal accruals and debt. JK Tyre said the investment was aimed at maintaining market presence amid robust industry demand.

The Chennai plant will receive the bulk of the investment. Chief Financial Officer Sanjeev Aggarwal said around Rs 4,500 crore, or nearly 90% of the total capex, would be invested in Chennai.

Singhania said passenger car radial expansion would be entirely undertaken at the Chennai facility, while truck and bus radial expansion would take place at both the Chennai and Vikrant plant in Mysore. “It is one of the largest capexes we are planning because we are seeing a robust demand future,” Singhania said.

The company said the expansion had been designed primarily around domestic demand but would also support exports, particularly to Europe. “Some portion will certainly go to export. Our mix today is nearly 13% export,” Singhania said.

Management said demand momentum remained strong going into FY27, driven by new vehicle launches, tax reforms, infrastructure spending and improving economic activity. “Growth momentum in FY27 is also likely to continue. We see buoyant demand both for replacement and OE segments,” Singhania said.

He added that replacement demand in the truck and bus tyre segment was expected to grow in high single digits to double digits during FY27, while the passenger car replacement segment would likely see single-digit growth.

“OEM demand and sentiments show better growth than replacement. Double-digit growth is expected in both TBR and PCRs in the OEM segment,” he said.