Indag Rubber FY26: The Year Other Income Almost Out-Earned the Tyres
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1. At a Glance
Indag Rubber closed FY26 with consolidated revenue of ₹214.5 crore, down 6% from ₹228.4 crore the prior year — the second straight year of topline shrinkage for a company that two years ago was a ₹251 crore business. And yet profit went the other way: consolidated PAT attributable to shareholders rose to ₹10.18 crore from ₹6.53 crore, a roughly 56% jump. Revenue down, profit up — a combination that always deserves a second look before applause.
That second look lands on the other-income line. In FY26 the company earned ₹10.3 crore of other income against ₹9 crore of operating profit. The non-tyre money — investment gains, interest, dividends thrown off by a ₹139 crore investment book — was, for a second consecutive year, in the same weight class as the actual retreading business. A retreader whose treasury pulls its weight is a particular kind of company.
The market currently pays about 23x earnings here, sitting almost exactly on the tyre-sector median of around 23x — except Indag does roughly ₹61 crore of quarterly sales against peers running into the thousands of crores. ICRA downgraded the company’s long-term rating in August 2025. A green-energy subsidiary booked its first commercial order. Borrowings nearly doubled.
A small company, a quiet promoter group, a profit recovery that owes as much to the investment desk as the factory floor. The tension is whether the tyres can carry the story on their own.
2. Introduction
Incorporated in 1978, Indag Rubber manufactures and sells precured tread rubber and allied products for tyre retreading — the business of giving a worn tyre a second tread rather than scrapping it. The company began as a joint venture between the Khemka Group and Bandag Inc. of the USA; the Khemka Group took over Bandag’s shareholding in 2006 and has run it since.
The model is straightforward and genuinely useful: a retreaded tyre, the company says, saves up to 70% of the cost of a new tyre and delivers about 70% of its life. Its single plant at Nalagarh, Himachal Pradesh, carries installed capacity of 20,000 MT of tread rubber, 5,000 MT of rubber strip gum, and 2,200 KL of spray cement, supported by 300-plus dealers, over 3,000 retreaders, and 15-plus depots across India.
FY26 was eventful beyond the P&L. ICRA downgraded the rating to [ICRA]A- (Negative)/[ICRA]A2+ in August 2025, citing weaker revenues and elevated raw-material costs. A clutch of GST notices arrived through 2024 and 2025. The National Sales Manager resigned, relieved in September 2025. The board declared a final dividend of ₹1.50 per share, taking the FY26 total to ₹2.40. And the company’s 51% subsidiary, Millenium Manufacturing Systems, moved from prototype to its first commercial order in green-energy power electronics — a business with nothing to do with tyres.
3. Business Model: WTF Do They Even Do?
They make the rubber that gives old tyres a new lease of life. A truck tyre’s casing outlasts its tread several times over; Indag sells the precured tread strips, the unvulcanised rubber strip gum that bonds tread to casing, the spray cement that protects the buffed surface, and the envelopes that hold it all together through curing. Five products, one job: keeping fleet owners off the new-tyre aisle.
The customer is the fragmented Indian trucking fleet, the M&HCVs, LCVs, passenger and off-road vehicles whose economics live and die on cost-per-kilometre. Indag’s pitch is that a retread brings cost-per-km down to roughly a third of a new tyre — a number that sounds irresistible until you remember the buyer is also being courted by hundreds of unorganised regional retreaders and by tyre OEMs running their own retreading lines.
Therein sits the model’s permanent tension. Indag has a recognised brand, ISO certifications, an R&D facility, and a 50-plus on-ground technical team — real moats in a business where most competitors have none of those. But it sells a commodity input whose price (natural and synthetic rubber) it cannot fully pass on, to customers who can always defect to a cheaper shed down the road. The result is a company that has spent years range-bound around the ₹170–250 crore revenue mark.
And then there’s the new appendage: Millenium, the green-energy electronics subsidiary in Mohali making power conversion systems for battery storage. A tyre-retreading promoter group deciding the future also runs through grid electronics is the kind of diversification that’s either prescient or a question for later. FY26 is too early to say which.
Does a brand built over four decades still command a premium when the product underneath is a rubber strip anyone can extrude?
