JK Tyre & Industries Ltd

NSE:JKTYRE

Q2-2026 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to JK Tyre & Industries Limited Earnings Conference Call hosted by Emkay Global Financial Services Limited. [Operator Instructions]

I now hand the conference over to Mr. Chirag Jain, Deputy Head of Research, Emkay Global Financial Services Limited. Thank you, and over to you.

[Chirag Jain]

Thank you, Samarth. Good afternoon, everyone. On behalf of Emkay Global, I would like to welcome you all to the Q2 FY '26 Earnings Conference Call of JK Tyre & Industries Limited.

Today, we have with us the senior management team represented by Mr. Anshuman Singhania, Managing Director; Mr. Arun K. Bajoria, Director and President, International; Mr. Sanjeev Aggarwal, Chief Financial Officer; and Mr. A.K. Kinra, Financial Adviser. We'll begin the call with opening comments from the management team, followed by the Q&A session.

Over to you, sir.

[Anshuman Singhania, executive]

Yes. Thank you, Chiragji. Good evening to everyone. I welcome you all to JK Tyre Q2 FY '26 Earnings Call. I'm glad to be here, and I have with me Dr. Arun K. Bajoriaji, Director, President, International; Mr. A.K. Kinraji, Financial Adviser; and Mr. Sanjeev Aggarwalji, the CFO.

At the outset, I would like to extend my heartiest greetings on the Dipavali and the festive seasons to all of you.

To begin, Indian economy maintained its position as the world's fastest-growing economy as it continues to demonstrate encouraging signs of growth led by resilient service export, softer crude oil prices, GST reforms and improving trade balances. GDP in Q1 FY '26 grew by an impressive 7.8% as against 7.6% in Q4 FY '25. With an outlook of 6.8% for the entire year of 2026, reflecting a resilience of the Indian economy even as it faced external pressures from U.S. tariffs and stress on trade globally.

Keeping in view the above, India's long-term growth prospect appears to be strong on the back of robust macroeconomic fundamentals, buoyant domestic demand and rising infrastructure development, which are further strengthening the India's position at the global footprint.

The government, in order to boost consumption, has reduced the GST on tires from 28% to 18% and on farm tires from 18% to 5%. This GST reduction will act as a catalyst for growth across the sectors and is expected to improve the overall auto demand by 8% to 9%. JK Tyre has passed on 100% benefit of GST reduction to its customers.

GST reduction lowered the total cost of ownership for the end consumers, which will lead to faster replacement of commercial vehicles on account of increase in consumption across sectors like FMCG, consumer durables, e-commerce and core sectors, which will have a positive impact on tire demand.

We are already witnessing a favorable tailwind in terms of festive demand and overall improved customer sentiment. Auto sales have witnessed a robust volume growth of 10% in Q2. Segment-wise, commercial category grew by approximately 9%, 2-wheeler grew by 11% and farm by 28%. Although the passenger vehicle category witnessed a modest growth of 2%, it has now started achieving strong numbers recently. Going ahead, commercial vehicle and passenger car segment are expected to grow in the mid-single-digit. Farm equipment and 2-, 3-wheeler category are set to grow at a high single-digit. This growth is led by steady replacement demand and healthy rural income.

EV market is soaring along with IC vehicles with 2-wheeler and passenger car taking the lead. This encouraging growth highlights an accelerated adoption of electric mobility in India, supported by new model launches, government incentives and increasing consumer awareness of sustainable transportation solutions.

Export vehicles greatly contributed to auto sector. In Q2 FY '26, export registered a double-digit growth of more than 20% and outpaced the domestic growth on a Q-on-Q basis. The tire industry has been performing well, and it is continuously gaining strength on a Q-on-Q basis.

I'm happy to share that JK Tyre has registered its highest ever consolidated revenue of INR 4,026 crores, up by 10% on a Y-on-Y basis. Consolidated EBITDA for the quarter stood at INR 536 crores with an improved margin of 13.3%. Improved operational performance is a result of higher sales volumes along with softening raw material prices apart from higher operational efficiencies.

I am delighted to share that UX Royale passenger car tires has been chosen for an exclusive fitment in the newly launched Hyundai CRETA Knight Edition, which is a testimony of our being the most trusted mobility partner of choice with OEMs.

We are amongst the few companies in India to launch an AI-powered voicebot that uses natural language processing for superior customer interaction and support. At JK Tyre, digital transformation continues to be a strategic priority and as a part of our resolve to secure organizational digital future.

We are proud to share that JK Tyre has once again secured the top-notch CareEdge-ESG 1+ rating, setting another benchmark in domain of sustainability. The above ESG rating demonstrates the JK Tyre leadership position achieved through proactive efforts across key environmental, social and governance theme, underpinning by comprehensive policies, advanced monitoring system and significant investment in renewable energy and decarbonization technologies.

Another noticeable achievement reflecting our commitment towards environment at JK Tyre is that, we have become the #1 company car manufacturer to publish Environmental Product Declaration, EPD on International EPD System platform for the 3 products in PCR and TBR category, enabling customers to make more informed choices and showcasing our commitment towards sustainability. With the combination of growing consumer demand and technological advancement and trust on innovation, JK Tyre is uniquely positioned for significant growth in the coming years while expanding its presence across domestic and international markets.

Now I would like to take you through some of the key operational highlights. We registered the highest ever turnover at the consolidated level with quarterly revenue at INR 4,026 crores, up by 10% on a Y-on-Y basis. Domestic market registered a growth of 15% in volume driven by noticeable uptick across the segment. Export volume grew by 13% over the previous quarter despite the uncertainty around U.S. tariff rates. TBR volumes in numbers in the replacement market grew by 22% year-on-year basis. Passenger line volumes grew by 16% in replacement market and also export volume registered a 6% growth on a Y-on-Y basis. Farm category volume also saw robust growth in OEM, a growth of 78% and in replacement, a 12% growth on a Y-on-Y basis. Two-, 3-wheeler category volume in OE segment grew by 155% on a Y-on-Y basis. On a quarter-on-quarter basis, raw material prices corrected by 3%.

Now I would like Bajoriaji to take us through the performance of Tornel.

[Arun Kumar Bajoria, executive]

Thank you, MD, sir. The Mexican economy continued to demonstrate resilience despite the uncertainties around U.S. tariffs. Notably, Mexico has surpassed China and Taiwan as the largest exporter to the U.S.A. during the first half of 2025. World Bank has raised the GDP growth forecast of Mexico to 0.5% for 2025 as compared to 0.2% earlier and the projection of 2026 GDP growth stands at 1.4%, which highlights the improved confidence in the Mexican economy. Bank of Mexico has further cut the benchmark interest policy rate to 7.75% in this quarter, which will improve consumer sentiment for overall economic growth.

I would like to highlight that in quarter 2, JK Tornel has achieved the highest ever sales compared to last 6 quarters. Domestic PCR and TBR sales hit their record highs in this quarter, and we are focusing to further increase these numbers in the coming quarters. Higher sales was achieved through better market coverage, increase in sales to mass merchandisers and focused sales approach in Brazil and Latin America markets. Exports to U.S.A. remained steady despite uncertainties of U.S.A. tariffs. Sales have bounced back to INR 639 crores as against INR 505 crores in previous quarter, a jump of 26%, thereby reflecting our relentless focus and concerted efforts to increase the top line.

JK Tornel's EBITDA for Q2 grew nearly fivefold, reaching INR 49 crores as compared to INR 10 crores in the previous quarter. EBITDA margins rebounded to previous levels and stood at 7.6%, reflecting an expansion of 560 basis points sequentially.

Further, PBT and PAT stood at INR 25 crores and INR 15 crores, both up significantly over the last quarter.

Further, the United States-Mexico-Canada Agreement, USMCA, is due for revision in 2026, and we are watchful for the same as it remains highly crucial to maintain trade relations and diplomatic ties with U.S.A.

Now I would request Mr. Sanjeev Aggarwalji to talk about the financial performance of JK Tyre for the second quarter of financial year '26. Thank you.

[Sanjeev Aggarwal, executive]

Thank you, sir. Thank you very much, and I would like to brief you all the key highlights -- about the key highlights for quarter 2 of financial year '26. The first one is consolidated revenues for Q2 FY '26 were recorded at the highest ever level in a quarter at INR 4,026 crores, which is up by 10% on a Y-o-Y basis as against INR 3,643 crores in the corresponding quarter. Consolidated EBITDA for Q2 was recorded at INR 536 crores as compared to INR 443 crores in Q2 FY '25, which is an increase of 21% on a Y-o-Y basis. EBITDA improved by 26% over the previous quarter. EBITDA margins during the quarter were recorded at 13.3% versus 10.9% in Q1, representing an improvement of 240 basis points over the previous quarter. Cash profits for the quarter stood at INR 428 crores, which is up by 38% on a Q-on-Q basis and 33% on a Y-o-Y basis. Profit after tax for the quarter stood at INR 223 crores, which is up by 54% on a year-on-year basis. Capacity utilization for the quarter was 88% on a consolidated basis. Radial capacities utilization continues to remain above 90%.

Exports in Q2 grew by 10% value-wise sequentially despite the tariff-related challenges. Both the subsidiaries, Cavendish and JK Tornel Mexico, witnessed robust performance in this quarter and added significantly to the overall financials of the company.

Consolidated EPS in Q2 improved to INR 8.08 as against INR 6.03 per share in Q1. Return ratios have been improving continuously. ROCEs and ROEs have remained robust in Q2.

Net debt as on 30th of September stood at INR 4,201 crores as compared to INR 3,862 crores as on 30th of June '25, which is up by INR 339 crores, which is mainly on account of increase in working capital requirement for carrying higher inventories of finished goods. On the other hand, gross debt increased by INR 243 crores. This is mainly -- the funds have also been utilized -- the funds which were available with the company have been utilized for the purpose of the project implementation, which are underway.

The balance sheet of the company continues to remain healthy. And as I said earlier, the robust key financial ratios, leverage ratios, net debt-to-equity at a level of 0.75 and net debt-to-EBITDA at 2.5 multiples as on 30th of September.

So regarding the merger update, we are just nearing the final hearing date, which is scheduled for tomorrow. And this is the final hearing with NCLT Jaipur, and we are expecting the merger to be completed in all respects in terms of the effectiveness by end of November 2025, which will bring us a lot of synergies in terms of the merged entity, and we will keep you informed about the benefits which we are gaining out of this merged entity.

Thank you so much. So we now open the forum for questions. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Mr. Basudeb Banerjee from CLSA.

[Basudeb Banerjee, analyst]

Congrats for a good set of numbers. Just a few questions, sir. One, first question for Sanjeevji. Sir, like from the cash flow statement, almost INR 610 crores of CapEx in first half. And as you said, working capital increased this quarter, and that's how one can see gross debt more or less to have remained unchanged. So what is the outlook for full year CapEx? And how do you see the working capital normalization in coming quarters so that one can see a good FCF generation in second half?

[Sanjeev Aggarwal, executive]

Yes. So this is regarding the total cash available, what we have incurred so far in the first half, which is about INR 610 crores. And almost the equal number, which is about INR 600 crores roughly is going to be spent in the second half as we receive machines for the projects which are under implementation. So INR 1,200 crores of the total CapEx outflow is scheduled for this year. And this includes, of course, some amount towards the normal maintenance CapEx as well.

And as far as the working capital is concerned, this was pure intentional addition to the finished goods because we wanted to be ready for the festive season. So there was an addition of some finished goods [ probably ] preparedness towards the festive season. But I think now this working capital overall reduction would be there. And we are hoping that with this reduction, working capital will come back to the normal levels.

[Basudeb Banerjee, analyst]

And sir, can you give some breakup of the growth CapEx, which segments you are investing in using this INR 1,200 crores?

[Sanjeev Aggarwal, executive]

Sure. So we have been -- as you are aware, we have been implementing at the moment 3 projects. One is for the passenger car radial, which is for INR 1,025 crores at our Banmore unit, which is near Gwalior. The second expansion, which is going on is for Laksar tire plant, and this is for TBR tires, and this is INR 261 crores. And the third one is INR 112 crores for the light truck radial tires, all steel light truck radial tires, which is going on at Vikrant tire plant. So these 3 projects put together will come up for production in the quarter 3 and the ramp-up will slowly happen to the level of -- the highest level of 90 to 100 over the next 6 months' period.

[Basudeb Banerjee, analyst]

Sure. And overall utilization as of now would be what, close to 85%?

[Sanjeev Aggarwal, executive]

No, this is more than 90% for the radial categories where we are expanding, and this is going on very well in fact.

[Basudeb Banerjee, analyst]

Sure. Sir, second question is, as you mentioned, raw mat basket was down 3% Q-o-Q. And one can see that natural rubber prices are down to some INR 185 a kg from INR 205 sometime in August. So how do you see in December, March quarter, other than the crude price correction, which is pushing up the margin now, the natural rubber price correction should aid margin improvement further? Any comments on that?

[Sanjeev Aggarwal, executive]

Yes.

[Anshuman Singhania, executive]

Yes. So we see that the raw material price is going to be range bound in the coming quarters. And definitely, it will help us in the margin expansion.

[Basudeb Banerjee, analyst]

Sure. And last question, has there been any -- in any segment replacement market price cut to pass on the raw mat reduction in last quarter?

[Anshuman Singhania, executive]

No. There has been no price revision.

[Operator]

The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers.

[Rehan Saiyyed, analyst]

So I have only one question. I want to understand regarding the export side. So your export grew 13% quarter-on-quarter despite U.S. tariff uncertainty. So like I want to understand what is your plan B in case tariffs [ stands more than ] in current year '26? And are you reallocating volumes to alternate geographies or increasing product mix of higher margin SKUs to offset impact? Like what was the management view on this? Could you please explain?

[Anshuman Singhania, executive]

You see the export at large grew. Here, our export to the highest tariff country, which is U.S.A. we have a total 3% exposure from the total revenue to the U.S.A. that we have successfully diverted to other companies where we are -- other countries, sorry, where we are already participating. So namely Mexico, Latin America, Brazil, we have been able to sort of divert and our strong markets being Middle East and even Southeast Asia, which we are exporting. And we are also exploring new markets like EU and U.K. and even Africa. So that will be our continuous focus on those lines.

[Rehan Saiyyed, analyst]

Okay. So do you think it will compress our margin in anyhow if we do this thing?

[Anshuman Singhania, executive]

No, it will not impact our margins. If at all, it will improve our margins.

[Sanjeev Aggarwal, executive]

Just to clarify that because we have already diverted a lot of our exports, which were going earlier to U.S. markets, as I already mentioned. So we are now -- once this agreement is there in place between India and U.S., that will be additional opportunity for us to export to that market.

[Rehan Saiyyed, analyst]

Okay. Fair enough. And last one bookkeeping question I want to ask, could you give any guidance of EBITDA margin that you can sustain over the next 2 to 3 quarters?

[Anshuman Singhania, executive]

So you're talking about the margin. So margin is also going to be in the range of 13% to 15% and which we will be able to achieve.

[Operator]

The next question is from the line of Abhishek Kumar Jain from AlfAccurate.

[Abhishek Jain, analyst]

Congrats on a strong set of performance. Sir, my first question on the Mexico business. So what was the average realization in terms of the rupee versus Mexican peso in this quarter? And now that rupee versus Mexican peso has moved at around INR 4.8 per INR in last 2, 3 months, which is very much positive for your company. So just wanted to understand what benefit you will get because of this currency movement.

[Anshuman Singhania, executive]

So here in terms of rupees, rupees we are -- our revenue growth has been 26% on a quarter-on-basis. And in terms of our constant currency, we -- to the Mexican rupee -- Mexican peso has been 20% on a quarter-on-quarter basis. And we have seen that the depreciation of rupee to Mexican peso has been 7% on a quarter-on-quarter basis.

[Abhishek Jain, analyst]

Okay. So what was the average realization there?

[Anshuman Singhania, executive]

Sorry, the realization?

[Abhishek Jain, analyst]

Average realization rupee versus Mexican peso.

[Arun Kumar Bajoria, executive]

No, average realization because there are number of SKUs, number of products for this is not possible, but definitely, it has gone up. And we have taken the benefit of depreciation of rupee. And going forward also, if this continues, then I think we will gain it further.

[Abhishek Jain, analyst]

Okay. And how is the demand scenario there in domestic and exports from both?

[Arun Kumar Bajoria, executive]

Yes, it's very good. It's improving further. You see we are expecting that the Mexican exports to U.S.A. should be better because they are now going to conclude a deal. And as I mentioned in my opening, this U.S., Mexico and Canada agreement. So we are hoping that going forward, we will be able to maintain and improve our sales as well as our margins.

[Anshuman Singhania, executive]

And adding to that, our push within Mexico and Brazil and LatAm, which we are exporting from Mexico, we are expanding in terms of our white spaces and our channel partners as well. So we see a good opportunity in terms of higher demand coming in from these countries.

[Abhishek Jain, analyst]

Okay. So what sort of the run rate we can see in the Mexican business in the coming quarters, sir? We have seen very good growth in this quarter and 8% Y-on-Y growth. But if you see the past numbers, then we are doing around INR 700 crores kind of the revenue from the Mexico in the 1.5 years back. So can we able to achieve that number, sir?

[Anshuman Singhania, executive]

We see a continuous growth because we are -- as I told you and Bajoriaji said that we are funding newer markets, opportunities to expand our dealer base and find white spaces in Mexico and exporting countries from Mexico. So -- and we are also enlarging our offering of development of newer products. So we see a good growth coming in and a healthy growth for the year also coming in.

[Abhishek Jain, analyst]

Okay. And my next question is on the domestic side, we have seen very strong growth in the replacement business. That has gone up by around 28% Y-on-Y in this quarter. And basically TBR replace demand was very much strong. So what are the green shoots visible in the TBR replacement segment and how it may be sustainable?

[Anshuman Singhania, executive]

So we have seen a comeback of OE as well in the CV segment, which was muted. We see that -- and we understand that in the replacement market right now, the inventories which the dealers were carrying in terms of tires that has been flushed out. And thanks to GST, it has brought a lot of demand surge there. And we see with the better monsoon and we see with the better infrastructure push by the government and clubbed with rural demand coming in. So we see a very positive trajectory of demand. So that is all argues well in terms of our demand for our truck radial tires. So going forward, we see overall, all categories should do well in the replacement as well.

[Abhishek Jain, analyst]

So in overall TBR business, how much contribution of LCVs in your segment, sir?

[Anshuman Singhania, executive]

So -- and you said about the LCV.

[Abhishek Jain, analyst]

Yes.

[Anshuman Singhania, executive]

So our CV segment contributes almost around 60% of it.

[Abhishek Jain, analyst]

Okay. And how much contribution of the LCV in -- [ lately ]?

[Arun Kumar Bajoria, executive]

So overall the 60% is the commercial vehicle, as MD sir said. And out of which LCV, SCV then, of course, MCV, there are various segments which are there. So we don't have the ready number at the moment, but we can provide this update.

[Abhishek Jain, analyst]

And how is the mix in the TBR versus TBB?

[Anshuman Singhania, executive]

So LCV non-truck, which also contributes -- has farm also. It will contribute somewhere 12% to 13% in our mix.

[Abhishek Jain, analyst]

And how is the mix TBR versus TBB?

[Anshuman Singhania, executive]

So TBR is almost around 40% to 45% and TBB would be around in the range of about 10% to 13%.

[Operator]

The next question is from the line of [ Aditya Akhani from Shah Capital ].

[Unknown Analyst]

Two questions from my side. I wanted to understand geo and category mix of India operations for Q2 FY '26.

[Anshuman Singhania, executive]

Could you repeat the question, please?

[Unknown Analyst]

I wanted to understand geo and category mix of Q2 FY '26 of India operations.

[Anshuman Singhania, executive]

So the category mix here would be -- in terms of -- so that would be in terms of value, 43% would be in -- 57% would be in the truck space, around 30% would be passenger line radial and about non-truck bias would be about 10%. This is the mix.

[Unknown Analyst]

Okay. And geo mix?

[Anshuman Singhania, executive]

Sorry?

[Unknown Analyst]

And geo mix, market mix, replacement OEM and…

[Anshuman Singhania, executive]

Yes. So replacement is 60%, OE is about 30%, and our export would be about 14%.

[Unknown Analyst]

60%, 30% and 14%?

[Sanjeev Aggarwal, executive]

60%, 27% OEM, and 14% exports.

[Unknown Analyst]

Okay. And stand-alone number, those drop of INR 173 crores versus quarter 1, while India revenue has moved up by INR 63 crores in same period. Can you throw some light on Cavendish performance?

[Sanjeev Aggarwal, executive]

No. So this is overall you are talking about between the 2 entities you are saying or India operations only?

[Unknown Analyst]

If I compare Q2 versus Q1, stand-alone number has a drop of INR 173 crores, while if I see segmental performance in consolidated statement...

[Sanjeev Aggarwal, executive]

There is no specific reason between the 2 quarters for some reason, let's say, the demand for the product from the OEM for JK Tyre tires is higher or it could be, let's say, in some quarter, it could be higher for the CIL tires. And in order to remove this kind of confusion, this entity will get bus, let's say, by the next quarter, and there will be only 1 segment -- 1 company to cater to. So this depends upon the OEM requirements to be catered to from which company. For us, it is the same. That is why I'm saying that India operations versus JK Tyre and CIL, you are asking or India operations. For us, it is one and the same thing, India operations.

[Operator]

The next question is from the line of [ Krish Jain ] from NAFA Asset Managers.

[Unknown Analyst]

Congratulations on a good quarter. My question is regarding JK Tornel. I wanted to understand what is the capacity right now and what is the capacity utilization as well?

[Arun Kumar Bajoria, executive]

The capacity is around 59 lakh tires and the utilization overall, including the radial and the bias would be in the range of about 80%, but the radial utilization is higher at nearly 88% in JK Tornel Mexico.

[Unknown Analyst]

Okay. And in the next round of CapEx, sir, how much will this capacity increase by?

[Anshuman Singhania, executive]

It will increase by around about 15%.

[Unknown Analyst]

And this is all for passenger car radial, right, sir?

[Anshuman Singhania, executive]

Radial, correct.

[Unknown Analyst]

Okay. And this will be online by December of this year?

[Arun Kumar Bajoria, executive]

No, it will be online from April '26. Quarter 4 '26.

[Operator]

The next question is from the line of [ Puneet Zaveri from Zaveri and Companies ].

[Unknown Analyst]

Just wanted to understand from -- because of GST rate cuts, what has been the market share gains for you in any of the segments, especially regarding OEs -- in OEMs, have you seen an increase in market share, especially for passenger car? Could you give us some perspective?

[Anshuman Singhania, executive]

Yes, sure. So GST has definitely brought in a lot of cheers to our tire segment. But particularly JK Tyre has really gained. And our share of business in the OEMs, particularly in the CV is the highest. There we have seen and we are seeing a good pull from the vehicle manufacturer. And also we are seeing a good traction coming in from the replacement as well. So we see this segment to do well in the coming quarters. We are out of the monsoon as well, and there's a lot of infrastructure push and rural demand coming in our way.

In the passenger car as well, there has been a good traction in the entry-level vehicle where we are also participating. And -- so that has seen the numbers also overall in the PLT go up. And also, we see that there is a good demand, which is coming in for the passenger as well in the replacement market. So it argues well in both the CV and passenger car. And plus, we are seeing the farm segment also coming in. So there also, we are likely to get good traction.

In the passenger as well, we have seen a good mix which we are very much focusing in terms of higher in sizes, and that is 16 inch and above. That is the premiumization. There also we have seen a good mix traction coming in from both OE and replacement.

[Unknown Analyst]

And is there any kind of quantification that you can give for the market share gain in these segments? Anything on passenger cars as well as CVs that you can provide right now?

[Anshuman Singhania, executive]

So we don't really quote any market share, but definitely, our volumes have grown and we are definitely have gained market.

[Sanjeev Aggarwal, executive]

Just to give you an idea, in the replacement market, Anshumanji mentioned earlier that in TBR, we have grown in the last quarter by 22% and in passenger car by 16%. So I think this is more than the market growth rate. So you can imagine that our market share has really gone up.

[Unknown Analyst]

And just one clarification. You mentioned about the capacity at JK Tornel. Could you just repeat the number, please? I missed that number.

[Arun Kumar Bajoria, executive]

The capacity I had mentioned was 59 lakh tires.

[Operator]

[Operator Instructions] The next question is from the line of Mitul Shah from DAM Capital.

[Mitul Shah, analyst]

Congratulations for a really great sequential improvement on top line as well as margin. Sir, one clarification that as per presentation, if I do the OEM calculation, it is showing double-digit decline, whereas last -- this Q2, OEM production seems to be quite strong. So anything I'm missing out? Or is it because of the Tornel replacement increasing? So how one should read about this?

[Sanjeev Aggarwal, executive]

In this segment, Mitul, you are saying?

[Mitul Shah, analyst]

OEM. The OEM segment, if I do the PPT calculation of you have indicated that...

[Sanjeev Aggarwal, executive]

This is because I think in number terms, if you see OEMs overall, we are talking about the overall increase in all the segments put together has gone up because there is a significant increase in the tractor tires with OEM and also in 2-wheeler and 3-wheeler and -- because if you compare the OEM numbers in terms of rupees crores, 2% approximately this is almost flat, but mainly on account of the 2-wheeler and 3-wheeler and the tractors, there has been some increase.

[Mitul Shah, analyst]

So overall OEM volume more or less flattish, we can say or there is a -- because revenue decline is coming 11%...

[Sanjeev Aggarwal, executive]

When you compare the overall volumes you are talking about, then it is not comparable. In some segments, it may have gone down, it may -- in some segments, it may have gone up. So that is why I'm saying segment-wise, we'll have to see.

[Mitul Shah, analyst]

So revenue-wise it is per your calculation, sir, what is the EBITDA growth if I take only revenue?

[Anshuman Singhania, executive]

In terms of the overall volume, we have grown Y-on-Y 43% on volume in the OEM.

[Mitul Shah, analyst]

It's coming 11% decline as per presentation...

[Sanjeev Aggarwal, executive]

Just you do one thing. You do only exclusion of the 2-wheeler and 3-wheeler segment and 2-wheeler and 3-wheelers -- with 2-wheeler and 3-wheeler, if you see then OEM is almost like 43% increase.

[Mitul Shah, analyst]

Okay. Understood, sir.

[Sanjeev Aggarwal, executive]

And if it is volume of 2-wheeler and 3-wheeler is not taken into account because there is a very significant increase in 2-wheeler, 3-wheelers. So OE has increased in volume by almost about 4% to 5%.

[Mitul Shah, analyst]

Okay. And sir, second question on the Tornel side that there is a decent Y-o-Y growth even if you adjust for the currency, there is some growth on the revenue side. And -- but margin improvement on a Y-o-Y basis, it's a contraction. So anything to do with the raw material or we are having previous quarter's high-value inventory of the commodities or anything on the other expense side, margin…

[Sanjeev Aggarwal, executive]

That I think, Mitulji, there is a very small variation between the 2 quarters on Y-o-Y basis. And that is because of -- I would tell you, this is the trading component difference. So last year, the trading was slightly lower and slightly it is more in this quarter, right? Although the margins are not very different. This is between 7% to 8% range only last year and this year.

[Mitul Shah, analyst]

Sir, last question on the India operations side. In FY '24, we really gained market share and outperformed strongly to the peers. But since last 5, 6 quarters, if I take the India operations revenue growth, it seems to be underperformance versus industry as well as peer group. So any market share loss one should think of or it is a product mix-related challenge or anything else? And what is the strategy to rectify that going forward? This is the last question, sir.

[Sanjeev Aggarwal, executive]

No, but I don't think there is anything like that. We have said that 15% volume growth in the domestic market is already there. So where is the question of any contraction in terms of the volume.

[Mitul Shah, analyst]

See, if I take the revenue growth of India operations, which you have mentioned in all the results, that is coming much lower than the [indiscernible] reporting for the India domestic business. So is it like a commercial vehicle not doing great and we are stronger on the commercial vehicle side? So that is like a product mix impact or market share or that is the question.

[Sanjeev Aggarwal, executive]

That is mainly because of the PCR and PCR as you are aware, the selling prices are linked to the increase or decrease in the raw material prices. So that adjustment might have reduced the slight number on account of the value.

[Anshuman Singhania, executive]

But on a year-on-year basis, on net revenue, India operation, it has grown by 10%.

[Mitul Shah, analyst]

Yes. It is slightly lower than the peers in earlier quarters. That was the question basically. But understood the point.

[Sanjeev Aggarwal, executive]

Peer comparison, I don't think we will be able to comment on this. Two-, 3-wheeler prices might have gone up or some other segment prices where we have fall in...

[Mitul Shah, analyst]

Yes. So that is like product mix might be the…

[Sanjeev Aggarwal, executive]

Product mix difference would be there. So it is not so strict. So comparison, we are not actually seeing the comparison with other companies. And in any case, it's only 1 or 2 companies which have declared the results for this quarter.

[Anshuman Singhania, executive]

And adding to Sanjeevji, I must mention that OEM in the CV, it is right now only picked up in this quarter 2, where we are very strong. So this previous or corresponding quarters, they were not as bullish in terms of their production. So…

[Mitul Shah, analyst]

Yes. That is I think right analysis or understanding that because of the commercial vehicle, which might have a slight impact on overall industry and that has expected.

[Operator]

The next question is from the line of Maitri Shah from Sapphire Capital.

[Maitri Shah, analyst]

Firstly congratulations on the INR 400 crores top line. My question is on the revenue. So do we -- what sort of guidance do you have for the second half of this year and also for the next financial year on the revenue?

[Anshuman Singhania, executive]

So as I was addressing the other investors that we see a good trajectory of demand our way. So we are very confident that we will be able to do a double-digit 10% growth on the revenue going forward.

[Maitri Shah, analyst]

That is great to hear. And secondly, you previously mentioned on the 3 CapEx projects we were working on. Could you please like mention them again with the amount of CapEx that we are investing in them?

[Anshuman Singhania, executive]

Yes, sure. So a total of INR 1,400 crores layout of our expansion. TBR, which is the truck radial tire, which we are expanding in Laksar, CIL with INR 261 crores. All steel light truck radial, which we are expanding in Mysore, INR 112 crores and passenger expansion, which is of INR 1,025 crores, which is happening in our Banmore. So we should see these going -- starting production from end quarter 3 FY '26 and right ramping up to next year.

[Maitri Shah, analyst]

That is great. And this does not include the $27 million for the Mexico CapEx that we are doing on. Is that correct?

[Anshuman Singhania, executive]

That is separate.

[Maitri Shah, analyst]

That is separate. Okay. And that going online from the fourth quarter of -- the first quarter of next year?

[Anshuman Singhania, executive]

Yes, that is right.

[Operator]

The next question is from the line of Nandan from Emkay Global.

[Nandan Pradhan, analyst]

Congrats on a great set of numbers this quarter. Sir, just a small question from my side. So in Q1, we had expected the tire industry to grow by about 7% or 8% for the full year. And like we've already sustained our own guidance of double-digit revenue growth for FY '26. So because of the recent GST cut and the festive surge that is going on, do you see any uptick in the guidance? Or would you sustain the same as the last quarter?

[Anshuman Singhania, executive]

No, very much so. We would stick to our numbers in terms of our guidance of this 10%. We are seeing a good surge coming in. So I'm sure this momentum will carry on. So -- but we will stick to the numbers which we have said.

[Sanjeev Aggarwal, executive]

In the previous question, you've answered that.

[Operator]

The next question is from the line of [ S. D. Bhaiya ] as an Individual Investor.

[Unknown Attendee]

Congratulations to you for a nice set of numbers. I've got only one question. With such a robust demand scenario, which you have painted, how prepared you are from supply side till the time actually your new comes in?

[Anshuman Singhania, executive]

So here, we are putting up capacity, as I've said in the previous response. So here, our capacities are coming in, in different time lags, PCR and TBR. So these capacities together will inch our capacities to 14% to 15%. And there, we will be able to cater to our increased demand.

[Unknown Attendee]

But as I understand your new capacities are coming in only in the last quarter of this financial year or first quarter of next financial year. So till that time, do you think you will be able to meet the demand -- surge in the demand?

[Sanjeev Aggarwal, executive]

No, we have mentioned earlier that the capacities for PCR, TBR and all steel light truck radial tires are coming in India in the third quarter. And in fact, the PCR capacity has already started in the month of October, but the ramp-up will happen by March -- and for all the products. So we are fully geared up to take up any requirement, any surge in demand and we are ready, we will be able to supply. We will not let any loss of sales on account of the capacities shortage. So this is definitely will get addressed.

And as far as the Tornel is concerned, we will be ready by the fourth quarter of this financial year. But in-between also when we start, we start with smaller capacities and then, of course, full ramp-up happen over a period of 3 to 6 months depending upon the product.

[Arun Kumar Bajoria, executive]

Plus capacity utilization is increasing.

[Sanjeev Aggarwal, executive]

Yes. So the capacity utilization is also possible in Tornel because we are already operating at about 85% capacity.

[Arun Kumar Bajoria, executive]

88%.

[Sanjeev Aggarwal, executive]

88%. So there is a scope to cater to that.

[Unknown Attendee]

Great, sir. So you are not seeing capacity constraint to meet with the increased demand?

[Sanjeev Aggarwal, executive]

Absolutely not.

[Operator]

As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

[Sanjeev Aggarwal, executive]

No, thank you. Thank you so much for joining this call as usual. And we are quite happy to have shared all the numbers and all the questions have been fully addressed. So thank you very much for this, and look forward to the next quarter. Thank you so much.

[Operator]

On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.