Balkrishna Industries Ltd — Q4 FY26

Balkrishna Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=NmrnhIlG-4c Published: 2 days ago

0:04 4 seconds Ladies and gentlemen, good day and welcome to the Bal Krishna Industries Limited Q4 F and FY26 earnings 0:12 12 seconds conference call. This conference call may contain forward-looking statements about the company which are based on beliefs, opinions and expectations of the company as on the date of this call. 0:24 24 seconds These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participal 0:33 33 seconds lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:40 40 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this 0:48 48 seconds conference is being recorded. I now hand the conference over to Mr. Rajiv Podar, Joint Managing Director. Thank you and over to you sir. 0:59 59 seconds Thank you Ysef. 1:01 1 minute, 1 second Good morning everyone and thank you for joining us today. Along with me I have Mr. Baj, senior president and director commercial and our CFO. 1:14 1 minute, 14 seconds Mr. Satish Sharma, senior president and director of strategy and business development. 1:19 1 minute, 19 seconds Mr. Ravi Jooshi our deputy CFO Mr. Sushil Mishra, head of accounts and SGA R I in advisor. 1:32 1 minute, 32 seconds At the onset, let me start by saying we have seen resilient we have been resilient in a challenging external environment. 1:42 1 minute, 42 seconds While macroeconomic uncertainties continue to persist at BKT, we remain confident in our ability to deliver 1:50 1 minute, 50 seconds sustainable and profitable growth over the medium to long term. 1:54 1 minute, 54 seconds Our financial performance has remained stable, reflecting the strength of our integrated business model and disciplined cost management. 2:03 2 minutes, 3 seconds We are now witnessing raw material price upticks due to supply chain disruptions and are closely monitoring the situation 2:12 2 minutes, 12 seconds while maintaining a steady balance between the supplier between superior product mix and price hikes to partially offset this impact. 2:21 2 minutes, 21 seconds I shall now discuss the performance updates of each of our business. Let me first begin with our OCD business. 2:30 2 minutes, 30 seconds We are pleased to report a quarter marked by continued sequential improvements in volumes supported by 2:37 2 minutes, 37 seconds gradual normalization across key markets. 2:41 2 minutes, 41 seconds H2 performance was significantly better than H1. This resulted in a strong operational year for the company where 2:50 2 minutes, 50 seconds we delivered our highest ever quarterly volumes in Q4 and also the highest ever volumes annually in the financial year 26. 3:00 3 minutes From end market perspective in Europe H2 showed good good recovery over H1 driven by easing in channel inventories. 3:09 3 minutes, 9 seconds Similarly in the Americas market we were witnessing improving traction supported by higher channel activity. We have 3:18 3 minutes, 18 seconds created a sharper focus in our goto market strategy for Americas in order to realize the true potential of the BKD product range in that market. 3:31 3 minutes, 31 seconds India continues to outperform all markets and witness a sustained momentum. 3:38 3 minutes, 38 seconds We are cautiously optimistic for the geography given the weather forecast of IMD for the upcoming monsoon season. 3:47 3 minutes, 47 seconds I shall now share some insights of our carbon black business. 3:52 3 minutes, 52 seconds For the financial year 26, our carbon black business recorded marginal revenue growth on year-on-year basis with third party sales at 39% of overall business. 4:04 4 minutes, 4 seconds In December 25, we commissioned our new line for carbon black taking the total capacity available to us at 2 lakh 65 kt. 4:13 4 minutes, 13 seconds I am pleased to share that we have witnessed full utilization levels for the new lines supported by a mix of 4:20 4 minutes, 20 seconds internal consumption and external third party sales. 4:24 4 minutes, 24 seconds To ensure energy circularity model company increased the captive power plant capacity at BH to 64 megawatt during February 26. 4:35 4 minutes, 35 seconds We are now targeting the balanced part of carbon black capacity to come on stream in Q1 of financial year 27. 4:43 4 minutes, 43 seconds In specialtity carbon black, we have already secured approvals for select rates across plastics, pressure pipes, and power cables and inks. 4:55 4 minutes, 55 seconds Moving to our onroad highway business, during the quarter, we continue to make progress on our long-term growth road 5:02 5 minutes, 2 seconds map with a strong focus on product diversification and market expansion. 5:09 5 minutes, 9 seconds We have entered the truck bus radial segment with a new product launches in February 26. 5:15 5 minutes, 15 seconds This segment is aligned with infrastructure growth increasing radialization trends thereby helping us to tap the replacement market opportunities that lie for us. 5:27 5 minutes, 27 seconds Further we have reowned the two wheelers tires where we have introduced select products targeting domestic market. 5:37 5 minutes, 37 seconds The distribution network and channel infrastructure for the on highway segment is being built with products being placed in the market starting 5:46 5 minutes, 46 seconds April 26 along with focused marketing campaigns with Ranir Singh our brand ambassador to popularize our entry in these newer segments. 5:56 5 minutes, 56 seconds The early response from the market has been encouraging reflecting acceptance of our product quality and performance. 6:03 6 minutes, 3 seconds Building on this momentum, the company plans to introduce the passenger car radial or PCR tires by the end of the 6:09 6 minutes, 9 seconds current calendar year followed following a phased and calibrated approach. 6:16 6 minutes, 16 seconds At BKT, we see our entry in these new segments as a strategic adjacency that complements our existing strengths. 6:24 6 minutes, 24 seconds At overall level, while macroeconomic uncertainties persist, we remain focused on the following volume growth with margin discipline. 6:36 6 minutes, 36 seconds Leverage our carbon black capabilities to improve efficiency and quality and lastly to scale up progressively our own highway business. 6:46 6 minutes, 46 seconds Let me now share an update on the BKT brand. During the year, we undertook a disposition. We undertook a 6:54 6 minutes, 54 seconds repositioning of the BKD brand architecture by differentiating the corporate and the regular lines by adding tires and carbon to product 7:03 7 minutes, 3 seconds branding aimed at making it more contemporary and emotionally engaging while retaining its core attributes of performance and reliability. 7:13 7 minutes, 13 seconds The same must have been noticed by all of you during the ongoing T20 league in India. 7:20 7 minutes, 20 seconds Integrated product and brand building initiatives across major digital and print platforms under the campaign elevate your drive with our brand 7:27 7 minutes, 27 seconds ambassador Ren Singh has received strong engagement and positive customer response. 7:34 7 minutes, 34 seconds These initiatives have enhanced brand recall supported new product launches and strengthened BKD's position positioning across domestic and international markets. 7:46 7 minutes, 46 seconds Now, let me quickly share insights on sustainability as highlighted in our FI25 report. 7:53 7 minutes, 53 seconds As part of our long-term strategy, sustainability continues to remain a core focus area at Balisha Industries. 8:01 8 minutes, 1 second During 25, the financial year 25, we have made steady across steady progress across our ESG priorities. 8:09 8 minutes, 9 seconds During the year, our S&P global corporate sustainability assessment or the CSA score improved to 58, reflecting 8:18 8 minutes, 18 seconds the steady progress of sustainability initiatives taken by us and reinforcing BKT's position among the leading Indian tire manufacturers on sustainability performance. 8:28 8 minutes, 28 seconds As a part of our CASR activities, we have entered into a partnership for establishing Narim Mongji Skill Tech 8:36 8 minutes, 36 seconds University in Mumbai through a commitment of contributed contribution of rupees 25 kores staggered over the next few years. As a part of this 8:45 8 minutes, 45 seconds initiative, a dedicated BKT school of engineering and technology will be set up reinforcing the company's focusing 8:52 8 minutes, 52 seconds focus on promoting skill-based higher education aligned with our industry needs. 8:59 8 minutes, 59 seconds Lastly, an important development as a part of commitment to robust governance, transparency and global press practices, 9:07 9 minutes, 7 seconds the board has approved the appointment of Deote Hkins and cells chartered accountant LLP at joint statutory auditor on the recommendation of the 9:15 9 minutes, 15 seconds audit committee and subject to approval shareholder at the issuing AGM. 9:23 9 minutes, 23 seconds Moving on to our ongoing and new capeex programs. As a part of our ongoing capeex plans, we have completed the 9:29 9 minutes, 29 seconds following. A new line of carbon black facility in BH taking our capacity to 265,000 9:37 9 minutes, 37 seconds kta. Increase the power plant capacity on BH from 40 to 64 megawatt. 9:44 9 minutes, 44 seconds In February 26, we completed phase one of this commercial vehicle radial tire project with a capex of 750 K adding 9:52 9 minutes, 52 seconds funible capacity of 800 tires per day for CBR and OHD. 9:58 9 minutes, 58 seconds We are now working on the completion of the balanced carbon black project which will take our overload capacity to 10:05 10 minutes, 5 seconds 360,000 kta or phase and phase two of the commercial radial vehicle tire project and also the PCR tire project which is scheduled to launch in FI27. 10:18 10 minutes, 18 seconds These projects are expected to be completed as per schedule. 10:23 10 minutes, 23 seconds The board of directors has approved an additional capeex of 2,000 cr which will support capacity expansion and 10:31 10 minutes, 31 seconds infrastructure development across both OC and onroad tire categories. AI enabled automation across onh highway 10:38 10 minutes, 38 seconds tire category and also the company sustainability initiatives. 10:44 10 minutes, 44 seconds This spend is intended to drive long-term cost efficiency, enhance operational re resilience, improve 10:51 10 minutes, 51 seconds sustainable performance and create scalable platform for future growth. 10:57 10 minutes, 57 seconds With this, I now move on to operational highlights. For the quarter, our OD 11:03 11 minutes, 3 seconds sales volume stood at 85,280% metric tons, a growth of 5% yearonear. 11:11 11 minutes, 11 seconds For the financial year 26, our volumes stood at 317,356 metric tons. 11:19 11 minutes, 19 seconds Our standalone revenue for the quarter stood at 2894 crores registering a growth of 2% yearonear. 11:27 11 minutes, 27 seconds This however includes a realized loss on foreign exchange pertaining to 47 crores. 11:35 11 minutes, 35 seconds For the financial year 26, standalone revenue today at rupes 10,656 crores registering flattish performance 11:43 11 minutes, 43 seconds on year-on-year basis. This however includes realized loss on foreign exchange pertaining to sales of rupees 164 crores. 11:53 11 minutes, 53 seconds The standalone IITA for the quarter was at 663 crores with a margin of 22.9%. 12:01 12 minutes, 1 second The margin was particularly reimpacted towards the end of the quarter on account of headwinds 12:08 12 minutes, 8 seconds faced due to geopolitical scenarios and its impact on supply chain. 12:14 12 minutes, 14 seconds For the financial year 26 the standalone IITA was at 2423 crores registering a 12:21 12 minutes, 21 seconds degree versus the margin however stood at 22.7%. 12:29 12 minutes, 29 seconds Profit after tax for the quarter was recorded at 295 crores while for financial year we have recorded a pat of 1222 crores. 12:40 12 minutes, 40 seconds Our cape expense for the year was 2,800 crores approximately. 12:45 12 minutes, 45 seconds As on 31st March the gross debt and cash and cash equivalents were 4,49 crores and 3,154 kores respectively. 12:56 12 minutes, 56 seconds Accordingly, we have a net debt of 895 crores. 13:01 13 minutes, 1 second The board of directors has recommended a final dividend of rupees 4 per equity share subject to shareholder approval at the upcoming AGM. This is in addition to 13:10 13 minutes, 10 seconds the 12 rupees that we have paid per share for the previous three quarters. 13:15 13 minutes, 15 seconds With this, I now conclude my opening remarks and leave the floor open to Q&A. Thank you. 13:22 13 minutes, 22 seconds Thank you very much, sir. We will now begin the question and answer session. 13:27 13 minutes, 27 seconds Anyone who wishes to ask a question may press star N1 on that touchown telephone. 13:33 13 minutes, 33 seconds If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. 13:43 13 minutes, 43 seconds Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 13:50 13 minutes, 50 seconds First question is from the line of Rakunandhan from Noama Research. Please go ahead. 13:57 13 minutes, 57 seconds Uh good morning sir and thank you very much for the opportunity. Uh for FI26 how much was the contribution of US to 14:07 14 minutes, 7 seconds volume and considering that now the tariff is 10%. 14:12 14 minutes, 12 seconds uh uh will we see us going back to 10% of volume in FI27 14:21 14 minutes, 21 seconds that is our ambition and that is what we are targeting for the year and how much was it in FI26 broad 14:30 14 minutes, 30 seconds approximately if you can indicate it was just it was just short of 10% but 14:37 14 minutes, 37 seconds close to that number understood uh on the uh uh commodity basket how 14:46 14 minutes, 46 seconds much was the impact in Q4 and uh the expectation for Q1 and if you can also indicate how much price hike has been taken so far. 14:58 14 minutes, 58 seconds So price hike we have taken between 3 to 5% already across various geographies and we are targeting round two in the 15:06 15 minutes, 6 seconds coming uh in this very month towards the end of this month and uh we'll have we'll continue to watch this and maybe 15:13 15 minutes, 13 seconds we may have to uh take further price hikes regarding the impact I'll hand over to Mr. 15:19 15 minutes, 19 seconds price raw material prices has gone up by approximately 4 5% for the last quarter 15:27 15 minutes, 27 seconds the quarter which we ended and what would be the expectation for 15:35 15 minutes, 35 seconds this quarter s that is June quarter it should approximately it may go up 15:42 15 minutes, 42 seconds around 7 to 8% Understood sir. And when you say 7 to 8% 15:51 15 minutes, 51 seconds it is as a percentage of revenue or the raw material basket increasing by 7 to 8%. 15:59 15 minutes, 59 seconds This is the raw material on raw material prices. 16:13 16 minutes, 13 seconds So does that answer your question? 16:17 16 minutes, 17 seconds Yes. Uh thank you. Uh on the freight cost, how much was the freight cost in Q4 as percentage of revenue uh given the 16:25 16 minutes, 25 seconds geopolitics and how do you see it for future? 16:30 16 minutes, 30 seconds It was about 4 and a half to 5% and uh we expect it to go up marginally the way things are subject to no further disruption. 16:41 16 minutes, 41 seconds Got it sir. Uh uh one question. 16:44 16 minutes, 44 seconds Sorry to interrupt Mr. Ragunan. May we please request you to rejoin the queue sir for the followup question. Sure. Thank you very much. 16:52 16 minutes, 52 seconds Thank you sir. 16:54 16 minutes, 54 seconds Ladies and gentlemen, in order to ensure that the management is able to address all the questions from the participant, please restrict yourself to two 17:02 17 minutes, 2 seconds questions only. Should you have a follow-up question, please rejoin the queue. 17:08 17 minutes, 8 seconds Next question is from the line of Siddharta from Noama. Please go ahead. 17:13 17 minutes, 13 seconds Yeah, thanks for the opportunity sir. Uh sir, first question is on this uh outlook. You said that in the second 17:20 17 minutes, 20 seconds half you have seen a pick up in Europe as well as North America is also improving. Given this backdrop uh for 17:28 17 minutes, 28 seconds the next year uh would it be possible to give some volume guidance uh how much are we expecting for the OT business and 17:37 17 minutes, 37 seconds uh on that I mean given that we have now started uh CV radial tires also uh some color there how much are you expecting 17:45 17 minutes, 45 seconds to sort of send in FI27 so we stopped giving guidance due to the 17:53 17 minutes, 53 seconds uh geopolitical scenarios and uncertainties But we are of course expecting growth but we don't give guidance on that. 18:00 18 minutes Thank you. And about the s CV radial tires. 18:07 18 minutes, 7 seconds The business has just begun and uh we are hopeful to reach our stated vision by 2030 and we are working towards that. 18:17 18 minutes, 17 seconds Understood. Uh sir on the cape side so you said additional 2,000 crex uh which has been announced now. So with that uh 18:26 18 minutes, 26 seconds how much are we expecting the total cap for FI20 18:37 18 minutes, 37 seconds in in this financial year about between 1500 to 1,800 crores. 18:43 18 minutes, 43 seconds Okay, understood. So I'll come back and thank you. 18:51 18 minutes, 51 seconds Next question is from the line of promote from incorrect capital. Please go ahead. 18:58 18 minutes, 58 seconds Yeah. Hi. Uh thanks for taking my question. So if I had to look at your uh presentation slide 16 uh you are talking 19:05 19 minutes, 5 seconds about overall capex till FI29 of 6,800 crores. Uh this includes the recent announcement of 2,000 crores. 19:14 19 minutes, 14 seconds Yes. 19:16 19 minutes, 16 seconds And uh where is this incremental 2,000 crores going into because your vision was anyway put out for FI30 is it going 19:25 19 minutes, 25 seconds into some surprises in capex cost or you are adding more mods what is that revision of almost 30% in capex 19:35 19 minutes, 35 seconds as I I'll read my commentary again the board has approved additional capex of rups 2,000 kores which will create 19:42 19 minutes, 42 seconds capacity extension and infrastructure development across Ross both OD and on-highway tire categories. AI enabled automation across onh highway tire 19:51 19 minutes, 51 seconds categories and the company's sustainability initiatives. This spend is intended to drive long-term cost efficiency, enhance operational 19:59 19 minutes, 59 seconds resilience, improve sustainability performance across the company and also create a scalable platform for the future growth. 20:08 20 minutes, 8 seconds So it's a combination of both capex and the productivity improvement if I heard you right. Yes. Yes sir. 20:15 20 minutes, 15 seconds Okay, thanks. And uh second one, since the capacity is coming on stream now for CV almost ready and car should be end of 20:24 20 minutes, 24 seconds the year, what is your uh current distribution network? How much you plan to increase uh by end of the year? Can you give some sense? 20:36 20 minutes, 36 seconds The prime uh I'm Sati Sharma. 20:39 20 minutes, 39 seconds uh the primary uh distribution in the form of distributors is nearly complete for both the categories and the number 20:47 20 minutes, 47 seconds of dealerships will be added as for the ramp up of sales but it need to be significant if I'm not 20:57 20 minutes, 57 seconds in line with the sorry I didn't get it 21:03 21 minutes, 3 seconds it will be in line with the sales ramp okay sure thanks and all the best. Thank and all the best. 21:13 21 minutes, 13 seconds Thank you. 21:16 21 minutes, 16 seconds Next question is from the line of Arjun Ka from Kotak Mutual Fund. Please go ahead. 21:22 21 minutes, 22 seconds Uh thank you for taking my question. Uh sir, the first question is on the American peace. So uh there is uh a 21:29 21 minutes, 29 seconds refund of the reciprocal tariffs. Uh just want to understand have we filed for uh the refund or will we get part of 21:36 21 minutes, 36 seconds it or will the uh importer distributor get if you could throw some color on this matter sir? 21:42 21 minutes, 42 seconds So in US we are importer on record. So uh whatever process is required we have already filed but as of now we have not received anything. 21:52 21 minutes, 52 seconds Fair. And what is the quantum that we would have filed sir? 21:58 21 minutes, 58 seconds Quantum uh as of now I'm not handy with the number. 22:03 22 minutes, 3 seconds 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 uh to our dealer distribution? 22:13 22 minutes, 13 seconds So as a fair practice, obviously we are supposed to pass back part of it. What's what was recovered from the customers? 22:21 22 minutes, 21 seconds Sir. Uh the second query is uh regarding uh the two-wheeler uh uh tires uh segment uh which we have uh done a lot 22:29 22 minutes, 29 seconds of marketing also on. What would our capacities be at this point in time? 22:36 22 minutes, 36 seconds Presently uh we are having a capacity about 100,000 tires a month 22:44 22 minutes, 44 seconds and again it'll go up as per the uh as per the market response. Sure. 22:51 22 minutes, 51 seconds Uh and uh in terms of the our outsourcing arrangements uh uh what is the peak scale up that we can do on this run? 23:01 23 minutes, 1 second At the moment we don't see it as a limiting factor. 23:04 23 minutes, 4 seconds Okay. Perfect. Uh sir just the last query is on the uh PCR side which we have endeavored to launch by the end of 23:11 23 minutes, 11 seconds this calendar year as mentioned in the opening remarks. Uh in the uh presentation you talked of premium positioning. Uh could you help us 23:19 23 minutes, 19 seconds understand what does this mean? Uh are we planning only on certain inch rim sizes? Uh are we looking at premium uh 23:27 23 minutes, 27 seconds to the market leader which I understand is Bridgestone or uh if you could just explain a little bit on the product positioning. 23:36 23 minutes, 36 seconds Yeah. What it what it implies is that we are not discounting our uh products. 23:41 23 minutes, 41 seconds We'll be in line with the market leaders. That's what it means. Sure. 23:48 23 minutes, 48 seconds Uh fair enough. Uh thank you and wishing you all the best. Thank you. Thank you. 23:57 23 minutes, 57 seconds Next question is from the line of Sagar Parik from Renaissance Investments Managers. Please go ahead. Yeah. Hi. Am I audible? 24:05 24 minutes, 5 seconds Yes, please go ahead. 24:06 24 minutes, 6 seconds Yeah, hi. Thanks. Thanks for taking my question. My question is on the on highway tire strategy. So, uh just wanted to make uh some sense. Could you 24:14 24 minutes, 14 seconds like firstly give us qualitative aspect of how you are planning to uh you know scale up your on highway overall? What would be the peak revenue and between 24:23 24 minutes, 23 seconds TBR PCR and the two wheelers and currently how many distributors are on board if something on the qualitative side will be helpful? 24:33 24 minutes, 33 seconds So our stated vision is 5,000 cr revenue by 2030. Uh we are holding on to that position. 24:40 24 minutes, 40 seconds Right. The distribution like I said the primary distributors are all complete we are about 90 in all uh for this these 24:48 24 minutes, 48 seconds categories and the dealerships will be expanded as please as per the sales plan right and how would be the margins uh in 24:57 24 minutes, 57 seconds this versus our off as we have mentioned in the past we are as a company looking to keep a sustained 25:06 25 minutes, 6 seconds uh uh IATA levels which we will continue to do for 23 20 to 25% is sustainable in your view in spite of the on highway scale up 25:16 25 minutes, 16 seconds that is a company as a whole yes it is that is we yet maintaining our position right and in terms of like near-term if 25:24 25 minutes, 24 seconds I have to look at fi27 because of uh the raw material cost pressures is it fair to say that near-term there could be some margin 25:33 25 minutes, 33 seconds pressure or you think that the price price increases would fully you know mitigate the impact of the RM pressure. 25:41 25 minutes, 41 seconds So at this moment we are uh seeing the pressure to come. We are evaluating the situation and see how much we can uh 25:49 25 minutes, 49 seconds pass on. But at this moment we may have some price. 25:56 25 minutes, 56 seconds All right. Yeah. Thanks for taking my question and that's it. Thank you. 26:04 26 minutes, 4 seconds Next question is from the line of Vijay Kumar Pande from Access Capital. Please go ahead. Hi 26:11 26 minutes, 11 seconds sir before taking my question couple of questions. Uh Mr. Vijay your voice is very low. 26:20 26 minutes, 20 seconds Uh am I audible now? Yes please go ahead. 26:25 26 minutes, 25 seconds Uh want so sir wanted to check uh the 26:31 26 minutes, 31 seconds on the TV. So do you expect uh the this segment to start generating revenue from 26:39 26 minutes, 39 seconds this quarter or will it be only in the later part of this year or later part of FY27? 26:48 26 minutes, 48 seconds You can just uh let us know this the impact will be very very insignificant in the first quarter but 26:55 26 minutes, 55 seconds thereafter it will start gaining in permanence. 26:59 26 minutes, 59 seconds Okay. And uh second in terms of um the 27:05 27 minutes, 5 seconds export guy the export demands of Europe in Europe some certain OST players they 27:13 27 minutes, 13 seconds are guiding for mid to mid slightest to mid single digit growth. So 27:20 27 minutes, 20 seconds is our expectation also around that level to grow for FI27 or will it be 27:28 27 minutes, 28 seconds lower because just want to understand uh the dynamics in play there. 27:34 27 minutes, 34 seconds So as I mentioned earlier we we don't give uh it's too volatile to give any guidance and we'll continue to monitor 27:43 27 minutes, 43 seconds we are 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're in 27:50 27 minutes, 50 seconds the best position to get market share whenever the market is there. Okay. 27:55 27 minutes, 55 seconds And this was firmly demonstrated in H2 of this last financial year. 28:03 28 minutes, 3 seconds Answer uh this uh 2,00 capex which uh we plan to do this will be entirely for 27 28:11 28 minutes, 11 seconds or it will be segregated between next two years. 28:16 28 minutes, 16 seconds It will be staggered over the next few years. Okay. Okay. Thank you. 28:24 28 minutes, 24 seconds Thank you. 28:26 28 minutes, 26 seconds Next question is from the line of Joseph George from IIFL Capital. Please go ahead. 28:32 28 minutes, 32 seconds Uh thank you. Um am I audible? Yes. Yes, please go ahead. 28:38 28 minutes, 38 seconds Yeah. So my question is u uh in relation to the capeex guidance that I put out 6,800 cr. So two questions on that. One 28:45 28 minutes, 45 seconds is uh does this amount 6,800 crores include anything that you have already spent or is that the number uh that we 28:53 28 minutes, 53 seconds should think of from FI27 to 29? That is the first question. Second question is sorry. 29:00 29 minutes So so the to answer the first question first is yes this is including what we have already spent. 29:06 29 minutes, 6 seconds So how much of the 6,800 have you already spent? Around 3,000 crores. 29:15 29 minutes, 15 seconds Okay. So only 3,800 crores is left for the remaining 3 years which is uh 208 29. Yes. 29:23 29 minutes, 23 seconds 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 would we think of maintenance per hour? 29:34 29 minutes, 34 seconds This is only project and maintenance is about 200 odd every year which will be extra which is also in the past has been always mentioned extra. 29:43 29 minutes, 43 seconds Understood sir. Thank you. Thank you. 29:50 29 minutes, 50 seconds Next question is from the line of Yash Agarwal from Narval Bank Securities. Please proceed. 29:56 29 minutes, 56 seconds Uh hi sir, thank you for the opportunity. I just wanted to understand in the car black business. If you could share the split between captive consumption and the external sales. 30:05 30 minutes, 5 seconds Additionally, what are the expected revenue contribution and the margin for this business? 30:14 30 minutes, 14 seconds 30% we are consuming locally from the current capacity and 70% is sold in the market and margins are as per industry 30:22 30 minutes, 22 seconds average and also the second on your revenue growth guidance by 20130 as you have 30:29 30 minutes, 29 seconds mentioned in the PPT like the five years category is 17% and since in FY 26 last year sales versus last year sales was 30:37 30 minutes, 37 seconds flat so can you assume that the four year Kagon would be above 20% % to reach our revenue growth expectation. 30:44 30 minutes, 44 seconds As the projects come on board, 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 uh second part of the stated 5-year vision. 30:57 30 minutes, 57 seconds Okay sir, thank you. That's all from my side. Thank you. 31:04 31 minutes, 4 seconds Next question is from the line of Sadhart from I thought wealth analytics LLP. Please proceed. Hi sir, my first 31:11 31 minutes, 11 seconds question is like what is the company's thoughts on the on highway uh tire 31:18 31 minutes, 18 seconds segment like long-term uh thought process behind entering this segment 31:30 31 minutes, 30 seconds long-term thought is that in I mean uh we are entering into an adjacent business which we see as a 31:37 31 minutes, 37 seconds uh growth intensive uh which provides sufficient growth levers to the company. 31:45 31 minutes, 45 seconds Okay. So like uh you you like you will be able to make the same kind of uh 31:51 31 minutes, 51 seconds return on capital the off highway and on road on road as we have mentioned uh we look at it as 32:00 32 minutes a company as a whole and we have maintained we'll be able to keep our sustained uh levels of IITA between 23 and 25% that is our endeavor. 32:09 32 minutes, 9 seconds Okay, my second question is like what is BKT's positioning in US and Europe in the VF tire category? 32:22 32 minutes, 22 seconds In what ways are you asking like uh like what what is BKT's market position? Who are who's the number one? 32:31 32 minutes, 31 seconds Who's the number two? Like that where does BKT stand there? 32:36 32 minutes, 36 seconds We have positioned ourselves as a premium player in that category. That's all we can answer for that. Okay. Thank you. 32:45 32 minutes, 45 seconds Thank you. 32:48 32 minutes, 48 seconds Next followup question is from the line of Ragun from Noama Research. Please go ahead. 32:55 32 minutes, 55 seconds Uh thank you sir for the opportunity. Uh sir on the Euro INR what was the realization for Q4 and what is the hedge rate for FI27? 33:12 33 minutes, 12 seconds 99 rupees for this quarter. 33:18 33 minutes, 18 seconds Thank you. And how do you see the hedge for FI27 given that uh current price is about 111? 33:27 33 minutes, 27 seconds It will be higher than this but uh it is not fully here. So we are unable to 33:34 33 minutes, 34 seconds but we should get a better realization compared to 99. Uh hopefully that will act as a support. 33:41 33 minutes, 41 seconds Definitely definitely understood sir. And just a 33:48 33 minutes, 48 seconds clarification, the TBR capacity uh you mentioned was 800 buyers per day. Would that be right sir? 33:56 33 minutes, 56 seconds That is for the phase one. How much will it increase to? 34:03 34 minutes, 3 seconds About 3,800 to about 3,800. 34:08 34 minutes, 8 seconds Uh uh so so 800 tires per day now and it will increase to 3,800 tires per day. Is that understanding correct? 34:17 34 minutes, 17 seconds Yes. Yes. 34:21 34 minutes, 21 seconds Got it. And on the PCR tires, uh how much capacity you'll be starting with in uh this year? 34:30 34 minutes, 30 seconds So uh we will start around the end of the year calendar year mentioned and in 34:37 34 minutes, 37 seconds the first phase we should be getting to 6,700 tires. 34:43 34 minutes, 43 seconds 6,700 tires per day capacity. Correct. 34:50 34 minutes, 50 seconds Thank you, sir. And uh on the channel inventory uh would the channel inventory at be at normal levels uh currently or 34:59 34 minutes, 59 seconds or do you see that uh there was deto which happened in FI26 and that would be an opportunity to uh do some restocking this year? 35:10 35 minutes, 10 seconds No, we see it at normal levels. 35:13 35 minutes, 13 seconds Uh, last question. In your opening remarks, you alluded to improving product mix as and price hikes as uh 35:21 35 minutes, 21 seconds your efforts to uh, you know, support the margins. If you can elaborate on that, how is the product mix improving for us? 35:31 35 minutes, 31 seconds So we are moving more towards the high-end uh radialized products the uh specialized uh products like iff 35:39 35 minutes, 39 seconds technology products. So we are working on those as a product mix and what would be the share s of radial tires in our mix. 35:50 35 minutes, 50 seconds I don't have that handy with me. 35:54 35 minutes, 54 seconds Okay sir. Uh thank you. Thank you for all the input sir. Very helpful. Thank you. 36:03 36 minutes, 3 seconds Next question is from the line of Hardik Sharda from Mavira MC. Please go ahead. 36:10 36 minutes, 10 seconds Oh yeah. Thank you for taking my question sir. Uh my question is regarding uh recycling of tires. So how 36:18 36 minutes, 18 seconds much of the content is uh I mean from percentage point of view is uh required 36:26 36 minutes, 26 seconds to uh be used in raw materials. 36:34 36 minutes, 34 seconds Hello am I audible? 36:37 36 minutes, 37 seconds No no it's not. Your voice is coming muffled. Uh is it clear now sir? 36:45 36 minutes, 45 seconds better. 36:48 36 minutes, 48 seconds Yeah. So my question is from a recycle point of view. So uh as a total raw 36:54 36 minutes, 54 seconds material uh cost or content, how much is your uh how much is the percentage of recycle content? 37:04 37 minutes, 4 seconds We are as per industry norms. 37:07 37 minutes, 7 seconds So uh is it from so from a government policy point of view is it stringent or uh how is the on ground uh you know replication of the policy? 37:21 37 minutes, 21 seconds See government doesn't mandate anything on the recycled product to be used in the tires. Whatever mandate is there related to that is EPR wherein the 37:29 37 minutes, 29 seconds producer is supposed to buy the certificate from the recycler which is we are buying as per the norms. Hope that helps. 37:38 37 minutes, 38 seconds Okay. Yeah. Yeah. Yeah. And uh does it affect the performance of the tire? No. 37:45 37 minutes, 45 seconds Why should it otherwise why would we use it? 37:48 37 minutes, 48 seconds Yeah. No, I thought uh it's from a you know circular economy point of view. Uh so that clears 37:56 37 minutes, 56 seconds sorry to interject again. I'm repeating government doesn't mandate any recycled product to be used in the tires. Hope 38:03 38 minutes, 3 seconds I'm clear. government only mandate to buy certificate not the material and those certificate are being used as per 38:10 38 minutes, 10 seconds the uh bought as per the norms if I'm not using any recycled product or there is no mandate then now it will 38:18 38 minutes, 18 seconds affect the performance right okay got it got it understood understood sir you just have to buy the credits and 38:25 38 minutes, 25 seconds not the uh recycled product understood thank that was my question thank you 38:34 38 minutes, 34 seconds Next question is from the line of Sri Ram R from Sada Capital. Please go ahead. 38:40 38 minutes, 40 seconds Uh thank you for the opportunity. Uh so what will be the you know value proposition for us in the on highway business like in terms of retail 38:47 38 minutes, 47 seconds pricing? What will be the average uh cost advantage uh versus the other players? 39:01 39 minutes, 1 second I mean it will be at par with the industry. What what what do you expect me to tell you on this? No, no. 39:09 39 minutes, 9 seconds Yeah, sure. Please go ahead. 39:13 39 minutes, 13 seconds No, no. In terms of retail pricing, uh whether we'll be like 15% uh cheaper than the uh market leader, something 39:21 39 minutes, 21 seconds along those lines. I mean, what are your thoughts on that? 39:24 39 minutes, 24 seconds Okay. Price positioning is at par with the market leaders. On par with the market leader. Okay. 39:31 39 minutes, 31 seconds Okay. And uh so then how do you expect uh to gain market share over there? What is your uh route to entry? 39:42 39 minutes, 42 seconds We have faith on our product uh uh quality and uh the value proposition that the product and the other 39:50 39 minutes, 50 seconds operations excellence uh points which are embedded in our strategy. It's too I mean in this earnings call possibly we 39:57 39 minutes, 57 seconds can't be explaining all those points to you. 40:01 40 minutes, 1 second Okay. And uh you did mention that we need to incur about 3,800 crores of KPEX. So what will be the source of funding for the same sense? 40:12 40 minutes, 12 seconds Inter will be a mix of both. We are yet working on it. 40:16 40 minutes, 16 seconds Okay. So so then uh in that case like we have about 4,000 tres of debt in the books. So can we assume that it's peak debt that we have in the books today? 40:28 40 minutes, 28 seconds Sorry. Can we assume that 4,000 crores is a peak level of uh debt or will it go? 40:34 40 minutes, 34 seconds We can't assume any 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. 40:42 40 minutes, 42 seconds We'll keep on making announcements as and when we make changes to it. Fine. Thank you. 40:50 40 minutes, 50 seconds Thank you. 40:52 40 minutes, 52 seconds Next question is from the line of Vijay Kumar Pande from Access Capital. Please go ahead. 41:01 41 minutes, 1 second uh just a followup wanted to understand about the other expenses. So the other 41:07 41 minutes, 7 seconds expenses has moved uh significantly in this quarter and also for years. So if 41:15 41 minutes, 15 seconds you can just highlight what is driving that and how do you see that going forward? 41:21 41 minutes, 21 seconds So as you as I mentioned in my opening remarks this was our highest ever quarter and best number. So it is in line with that increased uh production 41:30 41 minutes, 30 seconds the other expenses to make those conversion costs etc which has taken which has been accounted for. 41:38 41 minutes, 38 seconds So there is no theoretical jump it is just the increased numbers because of the increased production. 41:46 41 minutes, 46 seconds Okay. Okay. Thank you. 41:54 41 minutes, 54 seconds Next question is from the line of Sadhart from I thought wealth analytics LLP. Please go ahead. 42:01 42 minutes, 1 second My question is answered. Thank you. Thank you sir. 42:07 42 minutes, 7 seconds 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. 42:16 42 minutes, 16 seconds Thank you everyone for taking time out and uh joining us. We look forward to meeting you next quarter. Thank you. 42:23 42 minutes, 23 seconds Thank you so much sir. On behalf of Bal Krishna Industries Limited that concludes this conference. Thank you all for joining us and you may now disconnect your lines. Thank you.