Indag Rubber Ltd: From Tyre Retreading to Green Energy – But Margins Are Leaking Air

1. At a Glance

Indag Rubber, the company that has been saving truckers’ tyres (and wallets) since 1978, is now struggling to save its own margins. Once hailed as the poster child of cost-effective retreading, it has now taken a detour into green energy and EV infra. But while tyres got fresh treads, Indag’s EBITDA fell from 7% in FY24 to 1% in FY25 – a decline so steep even retread glue couldn’t patch it. With new ventures in Power Conversion Systems and EV battery swapping, the question is simple: is Indag diversifying or just drifting?

2. Introduction

Imagine running a company where the core business is literally about giving “second life” to old tyres, but your own profits are in desperate need of retreading. That’s Indag Rubber Ltd today.

Born in 1978 as a JV with Bandag Inc (USA), Indag pioneered tyre retreading in India. For decades, fleet operators and truck drivers swore by their precured tread rubber – a cheaper and eco-friendly alternative to new tyres. Retreading saves up to 70% cost and gives 70% life of a new tyre, which is why Indag built a loyal customer base across highways, mines, and godforsaken kaccha roads.

But then came FY24–FY25, and with it, the dreaded drop in margins. From a respectable 7% EBITDA margin to a laughable 1% in just one year, thanks to input cost spikes and struggling STU business. Meanwhile, promoters are trying to revive mojo through green energy, subsidiaries, and a JV with Sun Mobility for EV battery swapping. On paper, it sounds like a futuristic pivot. On ground, investors are still stuck asking: “Bhai, tyres ki dawai de ya battery ki?”

3. Business Model – WTF Do They Even Do?

Let’s break it down:

• Core Tyre Retreading Business: Indag manufactures precured tread rubber, strip gum, spray cement, and envelopes – the holy trinity of retreading. Customers include M&HCV fleets, logistics players, and mining operators.
• Consultancy Side-Hustle: They also provide “retreading process consultancy” – basically charging money to tell others how to recycle rubber better. Think of it as a YouTube tutorial, but with GST.
• Green Energy Diversification (via MMSPL): A new facility in Mohali is making Power Conversion Systems for Battery Energy Storage Systems (BESS). Sounds jazzy, but as of FY25 – zero revenue. Only beta units shipped, full production planned in FY26. Indag even gave a ₹20 Cr corporate guarantee for the subsidiary’s loan.
• EV Infra JV with Sun Mobility: Setting up swapping stations & smart batteries. India loves jugaad, but investors love cash flow. So far, the JV looks like PowerPoint optimism.
• Exports: Eyeing Middle East, Africa, and Europe. Attending expos like Tire Cologne in Germany and Automechanika Dubai. Because nothing says global dominance like free keychains at trade shows.

In short: a retreading company trying to look cool by flexing in green energy – while core profits are punctured.

4. Financials Overview

Commentary:

• Revenue fell harder than a truck tyre on a pothole.
• EBITDA positive but fragile – at this point, even a small rubber price hike can flip