Synopsis: Balkrishna Industries is outperforming peers like MRF and CEAT by focusing on the niche off-highway tyre segment, building a strong global export base, maintaining superior margins, and investing steadily in capacity, backward integration, and new growth segments. Its disciplined strategy provides better long-term visibility and profitability.
India’s tyre industry is dominated by well-known names, but not all players follow the same playbook. While some focus on high volumes in passenger and commercial vehicles, others have quietly built strength in specialised segments with better margins and global reach.
One such company has consistently delivered stronger profitability, higher export exposure, and clearer long-term visibility than its larger peers like MRF and CEAT, raising an important question: what exactly is driving this steady outperformance?
About The Company
Balkrishna Industries, also known as BKT, was founded in 1961 and is headquartered in Mumbai. It is an Indian multinational company focused on manufacturing off-highway tyres. BKT supplies tyres to both original equipment manufacturers and the replacement market. The company serves a wide range of sectors including agriculture, construction, mining, earthmoving, ports, forestry, lawn and garden equipment, and all-terrain vehicles.
It has a strong international presence, selling its products across many countries through a network of national distributors and long-term partnerships with leading global OEMs. The company is among the key players in India’s off-highway tyre segment. In addition to its core business, BKT is also active in sports marketing, with sponsorships such as Monster Jam and football leagues in Italy and France.
What Are The Offerings?
Balkrishna Industries offers the world’s largest range of off-highway tires, with a portfolio of more than 3,600 product variants. The company provides tires designed for specific uses, ranging from high-performance agricultural applications to heavy-duty requirements in mining, construction, and industrial work. Its products are built to deliver durability, reliability, and performance across different operating conditions.
BKT’s tires are used across a wide range of sectors, including agriculture, field cultivation, specialty farming, grounds maintenance, light transport, construction, industrial handling, infrastructure projects, material movement, mining, earthmoving, surface mining, load and haul operations, and quarrying activities. The company supplies tires to several well-known global OEMs, including John Deere, Kubota, Ferrari, Goldoni, Wirtgen Group, Sakai, CAT, TAFE, New Holland Agriculture, JCB, and others.
How Is BKT Outperforming Others?
Niche Focus vs Mass-Market Approach
Balkrishna Industries has built a strong business profile by focusing on the off-highway tyre segment, a niche where scale, technology, and specialization matter more than volumes. Unlike players such as MRF and CEAT, which largely operate in the mass passenger and commercial vehicle segments, BKT concentrates on agriculture, mining, construction, and industrial tyres.
Over the years, the company has steadily expanded its product range by entering new sub-segments and introducing new tyre specifications. Its total number of stock keeping units has increased from around 2,700 in fiscal 2019 to more than 3,600 today.
This steady portfolio expansion, along with strong operating efficiency and wide geographic diversification, has helped BKT increase its share in the global off-highway tyre market to nearly 6 percent. The company sells across more than 160 countries through a strong distribution network and maintains long-term relationships with leading global OEMs.
In agricultural tyres, BKT continues to strengthen its global leadership position. In mining tyres, it stands out as the only Indian manufacturer to develop all-steel radial tyres up to 57 inches, offering a full range across both bias and radial technologies. This positions the company well to benefit from long-term growth opportunities in the global mining tyre market.
Beyond tyres, BKT has also built a strong presence in tracks. It is expanding a dedicated manufacturing facility for tracks, with production expected to begin in the second half of 2026. Ongoing capital expenditure of around 35,000 tonnes per annum, along with de-bottlenecking initiatives, will increase total off-highway tyre capacity to 425,000 tonnes per annum.
This expansion supports BKT’s goal of reaching 8 percent global market share, with a longer-term strategic objective of moving towards a 10 percent share through phased and disciplined investments.
Strong Emphasis on Quality and Testing
Quality and performance remain central to BKT’s strategy. The company has received the Excellence level award under Caterpillar’s Global Supplier Excellence Program for mining tyres, recognising its performance in quality, delivery, and customer support. This marks the fourth consecutive year of this achievement, highlighting consistency rather than one-time execution.
To further strengthen product development, BKT has set up a dedicated vehicle dynamics and testing facility at NATRAX in Indore, which is Asia’s second-largest and longest automotive test track. This facility will support advanced testing and quality improvement for its commercial and passenger vehicle tyres. In addition, the Bhuj plant achieved a 5-star grading and received the Sword of Honor Award for 2025 from the British Safety Council, reflecting high standards in workplace safety, health management, and risk control systems.
Financial Strength and Long-Term Visibility
BKT reported an 11 percent year-on-year increase in revenue to Rs. 10,447 crore in fiscal 2025, driven by volume growth of around 8 percent despite geopolitical issues and global economic uncertainty. Growth was supported by resilience in the Indian market, where volumes grew 15 percent year-on-year. In H1FY26, volumes declined by about 4 percent year-on-year, largely due to lower sales in Europe following inventory build-up along with the recent uncertainties around the U.S. market because of the tariffs.
The company maintains a strong balance sheet, with gross cash and cash equivalents of Rs. 3,159 crore as of 30 September 2025. Management expects blended margins to stabilise in the 23 to 25 percent range after full commercialisation, which should support steady growth in absolute EBITDA. Backed by a better product mix and operational strength, BKT does not expect a sharp decline in return on capital employed as new capacities ramp up. With expanding market reach, additional product lines, and a potentially more favourable macro and tariff environment, the company remains on track towards its long-term revenue target of Rs. 23,000 crore by 2030.
Margin Advantage Over MRF and CEAT
Manufacturing off-highway tyres is labour-intensive, and BKT benefits from operating in low-cost locations, which gives it a structural cost advantage. Employee costs remain lower compared to most global peers, allowing the company to price products competitively while protecting margins. BKT has maintained operating margins above 24 percent for eight years, except in fiscal 2023 when margins dipped to 20 percent, which still remained healthy relative to peers.
Over the past 11 quarters, BKT’s margins have largely stayed above 20 percent. Although margins declined to 18 percent in Q1FY26, they recovered to 21 percent in Q2FY26. In comparison, MRF’s margins over the same 11-quarter period have ranged between 10 and 19 percent, with the last five quarters largely staying within the 12 to 15 percent band. CEAT’s margins are even lower, remaining in the 10 to 15 percent range over the past 11 quarters and between 10 and 14 percent in the most recent five quarters. This consistent margin gap highlights BKT’s superior operating efficiency and focused business model.
Export-Led Growth Model
Exports form a key pillar of BKT’s business. In H1FY26, Europe contributed 39.2 percent of revenue, followed by India at 34.9 percent, the Americas at 14.9 percent, and the rest of the world at 11 percent. This diversified geographic mix reduces dependence on any single market and provides better resilience during regional slowdowns. While Europe accounted for about 45 percent of revenue in fiscal 2025, the company has expanded its presence in the Americas, which contributed around 15 percent, and India, which accounted for nearly 28 percent of revenue.
In contrast, CEAT derived only about 19 percent of its revenue from exports in 9MFY26. MRF’s export contribution stood at around 8 percent of total revenue in FY25, unchanged from the previous year. MRF’s major export markets include the Philippines, Bangladesh, Nepal, and the UAE, while exports to the United States remain negligible. BKT’s strong global presence clearly sets it apart from these peers.
Backward Integration Through Carbon Black
BKT has achieved self-reliance in carbon black, a critical raw material for tyre manufacturing. Its carbon black plant also generates power for tyre facilities, reducing energy costs and providing better control over input expenses. Along with multiple sourcing arrangements for other raw materials, this integration supports stable operations and cost efficiency.
To further strengthen this advantage, the board has approved expansion of the carbon black plant, increasing capacity from 200,000 MTPA to 360,000 MTPA. The expansion also includes a 24 MW cogeneration power plant, taking total cogeneration capacity at Bhuj to 64 MW. This project is expected to be completed by early 2026. The increased capacity will support raw material availability, energy circularity, and sustainability initiatives, while also strengthening BKT’s position as a reliable supplier of carbon black to both domestic and international tyre manufacturers. Carbon black is expected to contribute around 10 percent of revenue by FY30.
Entry Into New Growth Segments
To drive the next phase of growth, BKT is planning an entry into premium passenger car radial tyres and commercial vehicle radial tyres, with an initial focus on the Indian replacement market. A pilot launch for commercial vehicle radials is planned for Q4FY26, followed by a gradual ramp-up. Passenger car radial tyres are expected to enter pilot production in Q3FY27, with a phased scale-up thereafter.
These new segments are expected to contribute around 20 percent of revenue by FY30, with a targeted market share of about 5 percent. Supported by a growing distribution network and the ability to serve niche and small order requirements, BKT has steadily diversified its product portfolio. This balanced approach strengthens long-term growth visibility and further differentiates BKT from mass-market focused peers like MRF and CEAT.
Conclusion
Balkrishna Industries’ outperformance over peers like MRF and CEAT is rooted in a clear and consistent strategy. By focusing on the off-highway tyre segment, BKT operates in a niche where technology, product depth, and global reach matter more than volumes. Its wide product range, strong OEM relationships, export-led business model, and steady capacity expansion have helped the company build a durable competitive position. Structural cost advantages, backward integration, and a strong emphasis on quality have further supported superior and more stable margins over the years.
Looking ahead, BKT appears well placed for long-term growth. Expansion into tracks, higher tyre capacity and carbon black, and a planned entry into new tyre segments provide multiple growth levers. With a strong balance sheet, disciplined capital allocation, and improving geographic diversification, the company has better earnings visibility than mass-market-focused peers. If execution remains steady, BKT is likely to continue gaining global market share and maintaining its margin advantage over the medium to long term.
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