TVS Srichakra Q2FY26 – Tyre Company With Inflation in Its Tubes and a CFO Spin Change Midway!
1. At a Glance
TVS Srichakra Ltd (TVSSC), the TVS group’s less flashy cousin who doesn’t make bikes but makes sure they keep rolling, reported another quarter of moderate traction. For Q2FY26, the company clocked revenue of ₹865.04 crore and PAT of ₹15.81 crore, marking a YoY growth of ~10% in sales and 22.7% in profits. The stock currently trades at ₹4,204, giving it a market cap of ₹3,261 crore — a price-to-earnings (P/E) ratio of 134, which could make even MRF blush and the CFO sweat.
Its ROE is barely 2.35%, ROCE 5.36%, and debt ₹795 crore, giving a debt-to-equity of 0.69 — not a flat tyre yet, but certainly under-inflated for comfort. The dividend yield is a modest 0.40%, which barely buys you a cup of chai after brokerage charges. Still, the stock has returned a stunning 48% in the last 3 months, proving that the market occasionally rewards hope over horsepower.
This quarter’s highlight? A fresh CFO entry, a trail of tax demands, and new off-highway tyres that scream “export margins please!”.
2. Introduction
Let’s get this straight: TVS Srichakra is that responsible kid in the TVS family who doesn’t grab attention like TVS Motor, but keeps the family vehicle steady — literally. With every Hero, Bajaj, and Honda zipping around on its tyres, TVS Srichakra has quietly built a rubber empire across India’s 640 districts.
Yet, being a tyre manufacturer is a tough gig. Your fate depends on crude oil prices, rubber costs, and monsoon moods. You’re neither the glamorous electric future nor the dull metal past — just the in-between rubber sandwich of capitalism.
In FY25–FY26, the company has been trying to shift gears with its Off-Highway Tyre (OHT) expansion and an ambitious ₹1,000 crore capex plan, a third of which went to its Milan-designed OHT dreams. Now, if you’ve ever wondered how Italian design and Madurai manufacturing meet — imagine a Pirelli tyre trying to fit into a Hero Splendor. That’s the vibe.
Still, TVS Srichakra’s global footprint — exports to 86 countries, retail network of 50,000+ tyre shops, and OEM links with all major two-wheeler brands — ensures that it stays in the game, even if profits feel like a puncture.
3. Business Model – WTF Do They Even Do?
If you think tyres are boring, you clearly haven’t seen how complex the TVS Srichakra menu is. This company makes rubber circles for:
2W & 3W Tyres: The bread and butter — or let’s say “the tube and tread” — of their revenue.
Industrial & Farm Tyres: For tractors, forklifts, and men who believe turning soil is therapy.
OHT (Off-Highway Tyres): The fancy export stuff used in construction and farming equipment.
About 84% of their Q1FY24 revenue came from domestic markets, and the rest 16% from exports. The company wants to push this mix toward higher exports because OHT tyres offer fatter margins than your average scooter tyre.
The aftermarket is their playground — about 37% of total revenues come from replacement sales. And when 50,000 tyre retailers push your product, even potholes start to look profitable.
TVS Srichakra’s client list reads like an Indian two-wheeler party invite: Bajaj, Hero, Honda, Suzuki, Yamaha, and TVS Motor. Yet, the top 5 customers bring in nearly half the revenue, meaning — if Bajaj sneezes, TVS Srichakra catches a cold.
They’ve even got an R&D centre in Madurai backed by a design hub in Milan, because apparently, even tyres need some Italian flair to justify a ₹1,000 crore capex plan.
4. Financials Overview
Quarterly Financial Snapshot (₹ crore):
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
865.0
842.0
819.0
+2.7%
+5.6%
EBITDA
66.0
59.0
48.0
+11.9%
+37.5%
PAT
15.8
12.9
13.0
+22.5%
+21.5%
EPS (₹)
20.5
14.5
16.8
+41.4%
+22.0%
Annualised EPS = ₹20.5 × 4 = ₹82.0 With CMP ₹4,204, that’s a P/E of ~51x (actual trailing P/E 134x, thanks to weak FY25 base).
🧠 Commentary: Margins improved a bit, but the business still rides on thin rubber. PAT margin for the quarter stood at ~1.8%, meaning they earn less per tyre than what a panipuri vendor makes per customer.
5. Valuation Discussion – Fair Value Range Only
Let’s roll through the math:
A. P/E Method Annualised EPS (₹82). Assume a fair P/E range for midcap tyre players: 25x – 35x. → Fair Value Range = ₹82 × (25–35) = ₹2,050 – ₹2,870.
B. EV/EBITDA Method EV = ₹4,031 crore, EBITDA (FY25) = ₹230 crore. EV/EBITDA = 17.3x currently. Peer median ≈ 10–12x (MRF, Apollo, CEAT). → Fair EV at 12x = ₹2,760 crore. Subtract net debt ₹795 crore → Equity Value ₹1,965 crore → Fair Value per share ≈ ₹2,550.
C. DCF Snapshot (Conservative) Assume 8% sales growth, 10% margin expansion in 3 years, 10% WACC, 3% terminal growth. → Fair Value Range ≈ ₹2,400–₹2,900.
🎯 Educational Range: ₹2,400 – ₹2,900 per share (For educational purposes only, not investment advice.)
6. What’s Cooking – News, Triggers, Drama
The company has been very busy announcing and paying taxes. Over the past year, TVS Srichakra has received not one, not two, but multipletax demand orders — ₹9.9 crore, ₹11 crore, ₹10 crore — and even an ₹81.95 lakh one (because why not). Either the tax department loves them, or their paperwork could star in a Kafka novel.
On the bright side, the company is acquiring green power faster than most ESG funds. In Dec’23, it bought stakes in Clean Max Genesis Private Ltd for a grand total of ₹6,660 — yes, not ₹6.6 crore — ₹6,660! That’s barely a single scooter tyre set, but apparently strategic.
They’ve also been investing in Evincea Renewables, spending ₹1.02 crore in Feb’25, signalling a shift toward renewable energy sourcing.
On the product front, they’ve gone international — unveiling new Trailhound Wild and Bee Wild tyres at EICMA Milan 2025, trying to tell Italians that “desi
