Tolins Tyres Targets 17-20% Ebitda Margin Over Next Three Years

Kerala-based Tolins Tyres is targeting Ebitda margins of 17% to 20% over the next two to three years, according to the company’s Whole Time Director, Sankarakrishnan Ramalingam. The company aims to balance its revenue streams equally between its traditional retreading business and the rapidly expanding new tyre segment within three years, Ramalingam told NDTV Profit.

Responding to a question on what the Ebitda margins will look like over the next two to three years, he said, “We have always guided in every investor meeting that probably the company would clock in a range of about 17% to 20% in terms of Ebitda and about 10% to 11.5% in terms of PAT (Profit After Tax).”

He also added that the second half of FY26 will be “extremely good”.

“If you are looking for margin visibility in terms of this year, I think going forward, the second half will be extremely good. And by the end of fiscal 26, I think the margins that we had topped up in March 25, we would have certainly reached that,” Ramalingam said.

He outlined the company's pivot from its retreading roots to a more diversified tyre manufacturing powerhouse. The firm is targeting 70% capacity utilisation over the next three years.

This shift could rebalance revenues to a near 50-50 split between retreading and new tyres, or even tilt slightly towards the latter at 45-55%.

 “We should certainly touch about 70% of the capacity utilisation. In terms of the product segment, I think we will be somewhere 50-50 or about 45-55 in favour of new tyres, since we are expanding the portfolio of new tyres in a big way,” the top executive noted.

The company's new tyre portfolio has also diversified from two-wheelers to include three-wheelers, SUVs, and, most recently, a wide range of agricultural tyres.

While Tolins Tyres refrains from issuing formal guidance due to the volatility in crude and rubber prices, Ramalingam expressed confidence in maintaining a "20-25% CAGR in terms of revenue very comfortably under good and bad conditions." 

He welcomed the recent GST reduction on tyres from 28% to 18% as an "extremely consumer-friendly and industry-friendly" move. 

However, Tolins Tyres, along with industry associations, is now advocating for a similar reduction for the retreading sector, which remains at 18% GST. He wants it to be reduced to 5%.

“We feel that the retreading industry is an environmentally friendly industry and for a developing economy like India, retreading is extremely important. More so because there are very few organised players in India,” he underscored.

Shares of Tolins Tyres closed 2.28% higher at Rs 192.5 apiece on the NSE, while the benchmark Nifty50 ended 0.43% higher at 25,114.