Revenue +22%, PAT -96% — margin collapse swallows growth

Stand-alone revenue ₹4,163 Cr, 18.2% YoY growth; consolidated ₹4,318 Cr, 22.3% YoY

CFO confirmed 16-18% surge Q1 vs Q4 in crude and natural rubber; 8-10% further pressure expected Q2

CFO disclosed cumulative 11% replacement (including July hikes), 5-7% IB, double-digit OEM effective 1 July

Current run rate USD 10M/month (≈USD 120M annualized); negative EBITDA in Q1; only 60% customer transition done by end-Q1

Revenue growth partly from price (1/3), volume growth (2/3); Q1 margin compressed 575 bps despite 7-8% price hikes, signalling cost still ahead of price

Prior guidance ₹1,000-1,200 Cr revenue with 12-13% margin now shows negative EBITDA Q1; recovery deferred to H2 FY'27, not imminent

₹1,205 Cr new capex approved for 53,000 additional 2-wheeler tyres, phased to FY'31; within existing ₹1,300-1,400 Cr FY'27 capex envelope

Maintained 'supportive but moderating' demand; explicitly flagged Q2 margin pressure to persist; no numeric margin recovery target given

11% cumulative replacement price hikes by early July (vs prior 'up to 10%' guidance); further 3-4% planned through August

OE >20% share in premium EVs, replacement indexed to overall ~13% market share, growing to 30-40% in 5 years

Further price hikes needed; taken on 1 July, indexed OEM hikes in place, continuation through July-August

Current USD 10M/month run rate (USD 120M annualized); expect growth from there

7-8% moved to 11% already; will take another 4-6% through July-August; competitor table is moving up

One-offs: warehouses, hiring, infra for overseas customer locations (Germany, UK, France, Poland). 90% transition by Sept; gross margin healthy but operating margins negative. Need 1-2 more quarters for clarity.

Local prices move in tandem with international (SICOM); currently at ₹20/kg premium due to supply chain disruptions & low inventory. Cannot forecast floor price impact; Q2 costs 'kind of fixed for us'; hope for correction in later quarters when normalcy returns.

Run rate USD 10M/month at customer prices (USD 120M annualized); transition period so no change positive/negative. When handling customers in H2, will know what to do with business. Positive about returning to margin level but will take time.

Price hikes lagging cost increases; still inadequate (margins prove it). Competitors taking hikes in different categories/dates; price table moving up. No rollback contemplated at this moment.

No offset because rupee-dollar moved minimally Q1; only LKR depreciated (310→335 to $1) without corresponding INR appreciation. Currency exposure in Lanka unhedged; 30% debt being converted to equity per board approval.

Within ₹1,300-1,400 Cr FY'27 envelope; current-year capex outflow not significant; phased to FY'31

Q1 delivered 22.3% (including CAMSO), 18.2% stand-alone; moderation expected in Q2. Replacement mid-single-digit, OEM mid-to-high single-digit, international strong despite Middle East headwinds.

Currently USD 120M annualized; no specific FY'28 target, only indication of growth from current base. Deferred to H2 when 90% customer transition complete (vs 60% at Q1-end).

Raw material costs expected to decline only 8-10% Q2 vs Q1 (vs 16-18% spike); price lag will continue impacting margins. Recovery dependent on raw material normalization + further price realization.

Currently negative EBITDA in Q1 (startup costs, warehouses, new hires); gross margin 'still healthy' per management. Operating margin recovery depends on 90% customer transition and direct servicing model launch.

Q1 capex ₹293 Cr. High capacity utilization across plants. New ₹1,205 Cr 2-wheeler capacity project approved (53,000 tyres, phased to FY'31) within existing envelope.

Crude oil >$100/barrel (April-May average), natural rubber ₹280/kg (15-year high); domestic premium ₹20/kg over international. Cost surge 16-18% Q1; Q2 expected 8-10% more pressure. Price hikes lag by 4-6 percentage points.

Management took 11% cumulative replacement price hikes but margins still compressed 575 bps QoQ. Q2 moderation expected. If demand proves elastic (volume declines >5% on pricing), margin recovery will be delayed. Competitor responses vary by category.

Only 60% customer transition by end-Q1; 90% expected by Sept (Q2-end). Currently EBITDA negative due to startup costs (warehouses, hires, offices in 5 countries) without matching revenue (Michelin still handling sales, CEAT gets only partial realization). Margin recovery to 12-13% pushed to FY'28, vague timeline.

LKR depreciated from ₹310-315/$1 to ₹335/$1 in Q1, triggering ₹48 Cr MTM loss (non-cash but impacting consolidated PAT). LKR historical range pre-crisis ₹185-190/$1; post-crisis fluctuation to ₹370-380/$1. Cannot be hedged; structural risk.

Management explicitly warned 'moderation in demand may happen in Q2' but expects demand not to 'fall off cliff'. El Niño poses risk to rural demand via reduced farm incomes. West Asia geopolitical disruption affecting supply chains and international sales. Replacement expected only mid-single-digit growth.