1. At a Glance – The Rubber That Refuses to Burst
Here’s a ₹439 crore market cap company selling tyres at ₹111 per share, trading at a P/E of 12.2, with ROCE of 21.3% and ROE of 18.2%. Sounds boring? Wait.
Q3 FY26 revenue came in at ₹93.29 crore, up 33.8% YoY. PAT stood at ₹10.49 crore. Sales are ₹319 crore TTM, PAT ₹36 crore, and debt is just ₹15.7 crore. Debt-to-equity? A sleepy 0.05.
But here’s the masala.
Working capital days have ballooned from 73 to 258 days. Cash flow from operations in FY25? Negative ₹61 crore.
So what do we have?
A growing tyre company with improving capacity utilisation, strong promoter holding (68.5%), low debt, but cash flow that behaves like a teenager — unpredictable and expensive.
Is this a rubber compound ready to explode upward, or is it just air pressure?
Let’s dissect.
2. Introduction – Smallcap Tyre, Big Ambitions
Tolins Tyres is not MRF. It is not Apollo. It doesn’t have Bollywood-level brand recall.
It has something else — niche positioning.
Founded in 2003, the company manufactures:
- Precured Tread Rubber (PCTR)
- Light Commercial Vehicle tyres
- Agricultural tyres
- 2W & 3W tyres
- Bonding gum and rubber compounds
It has 3 manufacturing facilities — two in Kerala and one in Ras Al Khaimah, UAE.
IPO raised ₹230 crore and listed in September 2024. Since then, the stock has corrected ~25% in 3 months.
Why?
Because markets are emotional. Rubber companies are cyclical. And smallcaps don’t get forgiveness for working capital issues.
But Q3 FY26 shows a rebound.
Management says deferred demand due to GST revision in Q2 converted into Q3 orders. Tractor rear tyre launch is starting to contribute.
So is this a turnaround quarter? Or just catch-up revenue?
Let’s get into the machine room.
3. Business Model – WTF Do They Even Do?
Let’s simplify.
They do two things:
1. Sell new tyres
For:
- Light Commercial Vehicles
- Agriculture
- Two/Three wheelers
2. Sell tyre retreading materials
Precured Tread Rubber (PCTR) — used to retread old tyres.
This is where it gets interesting.
India is price-sensitive. Retreading is cheaper than buying new tyres. So PCTR is a steady business, especially for fleet operators and state transport undertakings.
Revenue mix Q2 FY26:
- Tread Rubber: ~68%
- Tyres: ~32%
Geographical split:
- Domestic: 94%
- Exports: 6%
So basically — India-focused, retreading-heavy, working capital-intensive.
They’ve signed a 3-year offtake agreement with Apollo
