1. At a Glance – The Tyre That Refuses to Be Average
Balkrishna Industries Limited (popularly known as BKT) is that rare Indian manufacturing company which decided long ago: “I don’t want to fight MRF and Apollo in mass-market car tyres, I want tractors, mines, ports, and mud.”
And honestly, that stubborn niche obsession has paid off.
As of 29 January, BKT is sitting at a market cap of ₹45,520 crore, with the stock trading around ₹2,355, down ~12% over one year (so yes, even premium businesses get mood swings). The company clocked Q3 FY26 revenue of ₹2,737 crore, up 6.9% YoY, while PAT came in at ₹382 crore, down 15% YoY – cue investor anxiety music 🎻.
But zoom out. Operating margins remain a muscular 24%, ROCE is 16.7%, ROE 15.8%, and this is a business that sells tyres to 160+ countries, not momo plates outside Andheri station.
The valuation? Spicy. P/E of ~34.7, EV/EBITDA ~18.7. The question haunting Dalal Street is simple:
👉 Is BKT still a premium compounder… or has it started charging Michelin-level prices for Indian execution?
Let’s dissect, roast, and audit this tyre one tread at a time.
2. Introduction – How BKT Became the Michelin of Mud
BKT’s origin story isn’t flashy. No Silicon Valley garage, no TED Talk founder. Just a focused decision in 1987: Off-highway tyres only.
While others chased passenger vehicles and OEM discounts, BKT quietly built expertise in agriculture, mining, construction, ports, industrial, ATV, and turf care tyres.
Fast forward 30+ years, and BKT now controls 5–6% of the global specialty tyre market. That might sound small, until you realise this is a global market with brutal entry barriers, technical complexity, and customers who don’t switch suppliers just because someone gave a Diwali discount.
What makes BKT interesting (and dangerous to underestimate) is its pricing power. Between FY22 and FY24, standalone revenues grew 12%, driven by just 1% volume growth and 11% price growth.
Translation: They didn’t sell many more tyres – they sold the same tyres at higher prices and customers didn’t run
away.
Average realization moved from ₹2.86 lakh/ton in FY22 to ₹3.17 lakh/ton in FY24, and further to ₹3.26 lakh/ton in H1 FY25. This isn’t inflation pass-through. This is brand + specialization + lack of substitutes.
But before we declare BKT as tyre royalty, we must inspect the balance sheet, cash flows, capex addiction, and yes – the recent profit slowdown.
So buckle up. Or rather… inflate your tyres.
3. Business Model – WTF Do They Even Do?
Let’s simplify BKT’s business for a lazy but smart investor:
🚜 They make tyres for machines that don’t care about Instagram, but care a LOT about durability.
BKT manufactures off-highway tyres used in:
- Agriculture (tractors, harvesters)
- Mining & earthmoving (dumpers, loaders)
- Construction equipment
- Ports & industrial machinery
- ATVs and turf care equipment
These tyres are:
- Low volume
- High customization
- Technically complex
- High margin
- Replacement-heavy (machines chew tyres like samosas)
BKT has 3,200+ SKUs, which means insane complexity. This is not a “one tyre fits all” business. Each customer, terrain, load, and application demands a different design.
Revenue Mix Reality Check
Customer segment (H1 FY25):
- Agriculture: 59% (down from 66% in FY22)
- OTR (Mining/Construction): 37% (up from 31%)
- Others: 4%
This shift matters. OTR tyres are higher value, higher margin, and more technical. BKT is intentionally moving up the difficulty ladder.
Channel-wise:
- Replacement: 73%
- OEM: 25%
Replacement dominance = pricing power. OEM dominance = margin pain.
BKT chose wisely.
Geography-wise:
- Europe:
