Thank you very much, sir. We will now begin the question and answer session. First question is from the line of Raghunandhan from Nuvama Research. Please go ahead.

Thank you very much for the opportunity. For FY '26, how much was the contribution of U.S. to volume? And considering that now the tariff is 10%, will we see U.S. going back to 10% of volume in FY '27?

That is our ambition, and that is what we are targeting for the year.

And how much was it in FY '26, sir, broad approximately, if you can indicate?

Understood. On the commodity basket, how much was the impact in Q4 and the expectation for Q1? And if you can also indicate how much price hike has been taken so far?

So price hike, we have taken between 3% to 5% already across various geographies, and we are targeting around 2% in this very month, towards the end of this month. And we'll continue to watch this, and maybe we may have to take further price hikes. Regarding the impact, I'll hand over to Mr. Bajaj.

Raw material prices has gone up by approximately 4%, 5% for the last quarter, the quarter which we ended.

And what would be the expectation for this quarter, sir, that is June quarter?

This quarter, approximately, it may go up around 7% to 8% more.

Understood, sir. And when you say 7% to 8%, it is as a percentage of revenue, or the raw material basket increasing by 7% to 8%?

This is on raw material prices.

Sir, does that answer your question?

Yes. On the freight cost, how much was the freight cost in Q4 as a percentage of revenue given the geopolitics? And how do you see it for the future?

It was about 4.5% to 5%, and we expect it to go up marginally, the way things are, subject to no further disruption.

Got it, sir. One question...

Sorry to interrupt Mr. Raghunandhan, may we please request you to rejoin the queue, sir, for the follow-up question.

Sure.

Next question is from the line of Siddhartha Bera from Nuvama. Please go ahead.

Thanks for the opportunity. Sir, first question is on this outlook. You said that in the second half, you have seen a pickup in Europe, as well as North America is also improving. Given this backdrop for the next year, would it be possible to give some volume guidance, how much are we expecting for the OHT business? And on that, I mean, given that we have now started CV radial tyres also, some color there, how much are we expecting to sort of sell in FY '27?

So we stopped giving guidance due to the geopolitical scenarios and uncertainties. But we are, of course, expecting growth, but we don't give guidance on that.

The business has just begun, and we are hopeful to reach our stated vision by 2030, and we are working towards that.

Understood. Sir, on the capex side, so you said additional INR2,000 crores capex, which has been announced now. So with that, how much are we expecting the total capex for FY '27?

In this financial year, between INR1,500 crores to INR1,800 crores.

Okay, understood. I will come back in the queue.

Next question is from the line of Pramod Amthe from InCred Capital. Please go ahead.

Thanks for taking my question. So if I have to look at your presentation, Slide 16, you are talking about overall capex till FY '29 of INR6,800 crores. This includes the recent announcement of INR2,000 crores?

Yes.

And where is this incremental INR2,000 crores going into? Because your vision was anyway put out for FY '30. Is it going into existing capex cost, or you are adding more molds? What is that revision of almost 30% in capex?

I'll read my commentary again, the Board has approved additional capex of INR2,000 crores, which will create capacity expansion and infrastructure development across both OHT and on- highway tyre categories, AI-enabled automation across on-highway tyre categories, and the company's sustainability initiatives. This spend is intended to drive long-term cost efficiency, enhance operational resilience, improve sustainability performance across the company, and also create a scalable platform for the future growth.

So it's a combination of both capex and the productivity improvement, if I heard you right?

Yes. Yes, sir.

Okay. And second one, since the capacity is coming on stream now for CV almost ready and car should be end of the year, what is your current distribution network? How much you plan to increase by end of the year? Can you give some sense?

I'm Satish Sharma this side. The primary distribution in the form of distributors is nearly complete for both the categories, and the number of dealerships will be added as per the ramp- up of sales.

But it needs to be significant, if I'm not wrong?

It will be in line with the sales ramp-up.

Okay. Sure. Thanks and all the best.

Thank you for taking my question. Sir, the first question is on the American piece. So there is a refund of the reciprocal tariffs. Just want to understand, have we filed for the refund? Will we get part of it or will the importer distributor get? If you could throw some color on this matter, sir?

So in U.S., we are importer on record. So whatever process is required, we have already filed. But as of now, we have not received anything.

Fair. And what is the quantum that we would have filed, sir?

Quantum, as of now, I'm not handy with the number.

Sure. And since you're importer of the record, ideally it should come back to us. That's the fair understanding? Or do we need to pass part of it to our dealer distribution?

So as a fair practice, obviously, we are supposed to pass back part of it, what was recovered from the customers.

The second query is regarding the 2-wheeler tyres segment, which we have done a lot of marketing also on. What would our capacities be at this point in time?

Presently, we are having a capacity of about 100,000 tyres a month. And again, it will go up as per the market response.

Sure. And in terms of our outsourcing arrangements, what is the peak scale-up that we can do on this front?

At the moment, we don't see it as a limiting factor.

Okay. Perfect. Sir, just the last query is on the PCR side, which we have endeavored to launch by the end of this calendar year, as mentioned in the opening remarks. In the presentation, you've talked of premium positioning. Could you help us understand what does this mean? Are we planning only on certain inch rim sizes? Are we looking at a premium to the market leader, which I understand is Bridgestone? Or if you could just explain a little bit on the product positioning?

Yes. What it implies is that we are not discounting our products. We'll be in line with the market leaders. That's what it means.

Next question is from the line of Sagar Parekh from Renaissance Investment Managers.

My question is on the on-highway tyre strategy. So just wanted to make some sense. Could you firstly give us a qualitative aspect of how you are planning to scale up your on-highway overall? What would be the peak revenue between TBR, PCR and 2-wheelers? And currently, how many distributors are on board? If something on the qualitative side would be helpful.

So our stated vision is INR5,000 crores revenue by 2030. We are holding on to that position. The distribution, like I said, the primary distributors are all complete. We are about 90 in all for these categories. And the dealerships will be expanded as per the sales ramp.

Right. And how would be the margins in this versus our off-highway?

As we have mentioned in the past, we are, as a company, looking to keep sustained EBITDA levels, which we will continue to do.

So 23% to 25% is sustainable in your view, in spite of the on-highway scale up?

That is, the company as a whole, yes, it is. That is we are yet maintaining our position.

Right. And in terms of like near term, if I have to look at FY '27, because of the raw material cost pressures, is it fair to say that near term, there could be some margin pressure? Or do you think that the price increases would fully mitigate the impact of the RM pressure?

So at this moment, we are seeing the pressure to come. We are evaluating the situation and see how much we can pass on. But at this moment, we may have some price pressures, margin pressures.

Thanks for taking my question. That’s it.

Next question is from the line of Vijay Kumar Pandey from Axis Capital. Please go ahead.

So sir, I wanted to check on the TBR tyres, so do you expect this segment to start generating revenue from this quarter? Or will it be only in the later part of this year or later part of FY '27? If you can just let us know this.

The impact will be very insignificant in the first quarter, but thereafter, it will start gaining in prominence.

Okay. And secondly, sir, in terms of the export demands of Europe. In Europe, certain overseas players, they are guiding for flattish to mid-single-digit growth. So is our expectation also around that level to grow for FY '27? Or will it be lower? Because I just want to understand the dynamics in play there.

So Vijay ji, as I mentioned earlier, it's too volatile to give any guidance, and we'll continue to monitor. All we can say is that we are geared up to support the market as and when required. We are doing everything that we need to do to make sure we are in the best position to get market share whenever the market is there. And this was firmly demonstrated in H2 of this last financial year.

And sir, this INR2,000 crores capex, which we plan to do, this will be entirely for FY '27, or it will be segregated between next two years?

Next question is from the line of Joseph George from IIFL Capital. Please go ahead.

Yes. So my question is in relation to the capex guidance that you have put out, INR6,800 crores. So two questions on that. One is, does this amount, INR6,800 crores, include anything that you have already spent? Or is that the number that we should think of from FY '27 to '29? That is the first question.

So to answer the first question first, yes, this is including what we have already spent.

So how much of the INR6,800 crores have you already spent?

Around INR3,000 crores.

Okay. So only INR3,800 crores is left for the remaining three years, which is '27, '28, '29?

Yes.

Okay. And the second part of the question is, this is entirely project capex? Or does it include maintenance as well? And if it doesn't include maintenance, how much should we think of maintenance per year?

This is only project. And maintenance is about INR200-odd crores every year, which will be extra, which is also in the past has been always mentioned extra.

Understood, sir. Thank you.

Next question is from the line of Yash Agarwal from Nirmal Bang Securities. Please proceed.

I just wanted to understand in the carbon black business, if you could share the split between captive consumption and the external sales. Additionally, what are the expected revenue contribution and EBITDA margin for this business?

30% we are consuming locally from the current capacity, around 70% is sold in the market, and margins are as per industry average.

And also, the second on your revenue growth guidance by 2030. As we have mentioned in the PPT, like the five-year CAGR is 17%. And since in FY '26 versus last year sales was flat. So can you assume that the four-year CAGR would be above 20% to reach our revenue growth expectation?

As the projects and capacities come on board, you'll see the jumps coming up. So that is why it would be closer to the second part of the stated five-year vision.

Okay, sir. Thank you. That’s all from my side.

Next question is from the line of Sidharth from ithought Wealth Analytics LLP. Please proceed.

Long-term thought is that -- I mean, we are entering into an adjacent business, which we see as a growth intensive, which provides sufficient growth levers to the company.

Okay. So like you will be able to make the same kind of return on capital in the off-highway and on-road…

As we have mentioned, we look at it as a company as a whole, and we have maintained we will be able to keep our sustained levels of EBITDA between 23% and 25%. That is our endeavor.

Okay. My second question is, like what is BKT's positioning in U.S. and Europe in the VF tyre category?

In what ways are you asking?

Like what is BKT's market position? Who is the number 1? Who is the number 2, like that? Where does BKT stand there?

We have positioned ourselves as a premium player in that category. That's what we can answer for that.

Next follow-up question is from the line of Raghunandhan from Nuvama Research. Please go ahead.

Sir, on the EUR/INR, what was the realization for Q4? And what is the hedge rate for FY '27?

~INR99 for this quarter for euro.

And how do you see the hedge rate for FY '27, given that current price is about INR111?

It will be higher than this year, but it is not full year, so we are unable to comment.

But we should get a better realization compared to INR99. Hopefully, that will act as a support.

Definitely better.

Understood, sir. And just a clarification. The TBR capacity you mentioned was 800 tyres per day. Would that be right, sir?

That is for the Phase 1.

How much will it increase to?

To about 3,800.

So 800 tyres per day now, and it will increase to 3,800 tyres per day. Is that understanding, correct?

Got it. And on the PCR tyres, how much capacity you will be starting with in this year?

So we will start around the end of the year, calendar year, as Rajiv mentioned. And in the first phase, we should be getting to 6,700 tyres.

6,700 tyres per day capacity, correct?

Yes.

Thank you, sir. On the channel inventory, would the channel inventory be at normal levels currently? Or do you see that there was destocking which happened in FY '26 and that would be an opportunity to do some restocking this year?

No, we see it at normal levels.

Last question. In your opening remarks, you alluded to improving product mix and price hikes as your efforts to support the margins. If you can elaborate on that, how is the product mix improving for us?

So we are moving more towards the high-end radialized products, the specialized products like IF/VF technology products. So we are working on those as a product mix.

And what would be the share, sir, of radial tyres in our mix?

I don't have that handy with me.

Okay, sir. Thank you for all the inputs. Very helpful.

Next question is from the line of Hardik Sharda from Mavira AMC. Please go ahead.

Yes. So my question is from a recycle point of view. So as a total raw material cost or content, how much is the percentage of recycled content?

We are as per industry norms.

So from a government policy point of view, is it stringent? Or how is the on-ground replication of the policy?

See, government doesn't mandate anything on the recycled product to be used in the tyres. Whatever mandate is there related to, it is EPR when the producer is supposed to buy the certificate from the recycler, which is we are buying as per the norms. Hope that helps.

Okay. Yes, yes. And does it affect the performance of the tyres?

No.

Why should it? Otherwise, why would we use it?

Sorry to interject. Again, I'm repeating, government doesn't mandate any recycled product to be used in the tyre. Hope I'm clear. Government only mandate to buy certificate, not the material. And those certificates are being bought as per the norms. If I'm not using any recycled product or there is no mandate, then how it will affect the performance, right?

Okay. Got it. Understood. Sir, you just have to buy the credits and not the recycled product. Understood. That was my question.

Next question is from the line of Sriram R. from Sampada Capital. Please go ahead.

Thank you for the opportunity. So what will be the value proposition for us in the on-highway business? Like in terms of retail pricing, what will be the average cost advantage versus the other players?

I mean, it will be at par with the industry. What do you expect me to tell you on this?

No, no. In terms of retail pricing, whether we will be like 15% cheaper than the market leader, something on those lines. I mean, what are your thoughts on that?

Our price positioning is at par with the market leaders.

On par with the market leaders. Okay. So then how do you expect to gain market share over there? What is your route to entry?

We have faith on our product quality and the value proposition that the product and the other operations excellence points, which are embedded in our strategyI mean, in this earnings call, possibly we can't be explaining all those points to you.

Okay. And you did mention that we need to incur about INR3,800 crores of capex. So what will be the source of funding for the same, sir?

It will be a mix of both. We are yet working on it.

Okay. So then in that case, like we have about INR4,000 crores of debt in the books. So can we assume that its peak debt that we have in the books today?

Sorry?

Can we assume that INR4,000 crores is our peak level of debt? Or will it go...

We can't assume anything. It's a volatile world. It's a moving world. Projects are being announced. So we can't assume anything. We'll keep on making announcements as and when we make changes to it.

Thank you.

Sir, just a follow-up. I wanted to understand about the other expenses. So the other expenses have moved significantly in this quarter and also for full year. So if you can just highlight what is driving that? And how do you see that going forward?

So as I mentioned in my opening remarks, this was our highest ever quarter and best number. So it is in line with that increased production, the other expenses to make those conversion costs, etcetera, which has been accounted for. So there is no theoretical jump. It is just the increased numbers because of the increased production.

Next question is from the line of Sidharth from ithought Wealth Analytics LLP. Please go ahead.

My question is answered.

Thank you, sir. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you, everyone, for taking time out and joining us. We look forward to meeting you next quarter. Thank you.

Thank you so much, sir. On behalf of Balkrishna Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.