1. At a Glance
BKT, the king of off-highway tyres, posted Q1 profits down 41% YoY despite stable sales. Margins deflated like an under-inflated tractor tyre, leaving investors with a bumpy ride.
2. Introduction with Hook
Imagine a Formula 1 car suddenly switching to bullock cart wheels – that’s BKT’s Q1. While global demand wobbled, costs rose, and profits skidded. Still, with 3,200 SKUs and a 5-6% global share, BKT remains the big fish in its muddy pond.
3. Business Model (WTF Do They Even Do?)
BKT makes off-highway tyres for agriculture, mining, construction, and industrial use. Basically, if your vehicle is not on the highway, it’s probably using BKT tyres. They sell globally, with exports being a strong revenue driver.
4. Financials Overview
- Revenue (Q1 FY26): ₹2,760 Cr (+1.7% YoY)
- Net Profit (Q1 FY26): ₹288 Cr (-41% YoY)
- ROE (TTM): 15.8%
- ROCE (TTM): 16.7%
Operating margin slipped to 18% from 24%. Raw material and energy costs chewed margins.
5. Valuation
- Market Cap: ₹51,921 Cr
- P/E: 35.7
- P/B: 5.0
- Dividend Yield: 0.6%
Fair Value Range? ₹2,100–₹2,400. Paying current ₹2,686 means you believe this tyre will grip again.
6. What’s Cooking – News, Triggers, Drama
- Commissioned ₹300 Cr mould plant (July 2024) and ₹30,000 MTPA carbon material plant (Sept 2024).
- NCLT approved amalgamation with BKT Tyres (March 2024).
- IT department conducted search in 2024 (ouch).
- Demand from agri sector slowing, but mining/OTR holding up.
7. Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 15,635 |
| Liabilities | 15,635 |
| Net Worth | 10,388 |
| Borrowings | 3,267 |
Debt is manageable, but working capital days are creeping up.
8. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 1,448 | 2,082 | 1,764 |
| Investing | -1,783 | -1,475 | -1,480 |
| Financing | 359 | -601 | -279 |
Ops cash flow solid, but heavy capex eats up liquidity.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 15.8% |
| ROCE | 16.7% |
| D/E | 0.3 |
| OPM | 18% |
| P/E | 35.7 |
Still sexy, but margins lost some charm.
10. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 9,760 | 9,369 | 10,447 |
| EBITDA | 1,712 | 2,256 | 2,458 |
| PAT | 1,057 | 1,471 | 1,655 |
Growth is crawling, profits dipped in TTM.
11. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E | ROE |
|---|---|---|---|---|
| MRF | 28,152 | 1,868 | 34 | 10.6% |
| Apollo Tyres | 26,123 | 1,234 | 23 | 8.6% |
| CEAT | 13,554 | 459 | 30 | 11.7% |
| BKT | 10,492 | 1,453 | 36 | 15.8% |
BKT has better returns than peers, but premium valuation reflects investor optimism.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 58.3% (stable)
- FIIs: 10.5% (slightly down)
- DIIs: 24.7% (rising)
- Public: 6.4%
Steady hands holding the wheel.
13. EduInvesting Verdictâ„¢
BKT remains a strong player in the global OHT market, but Q1 FY26 shows margin pressure and profit squeeze. Expansion projects could add horsepower, but near-term bumps are expected. A well-built tyre, but don’t expect Formula 1 speeds right now.
Written by EduInvesting Team | 26 July 2025
Tags: Balkrishna Industries, BKT, Off-Highway Tyres, Q1 FY26 Results, EduInvesting Premium
