Tinna Rubber Q1 FY27 Earnings Call — Analysis (NSE: TINNARUBR)
Tinna Rubber reports record Q1 FY27 profitability with EBITDA margin above 21%, driven by value-added products and operational efficiencies.
The take
Q1FY27 Revenue ₹156.18 Cr ( +20% YoY ) . New guidance — FY27 fy27 revenue guidance ₹670 – ₹700 Cr . New story: Record profitability and margin expansion .
Results
Consolidated revenue up 20% YoY to ₹156.18 Cr; EBITDA margin >21% (+575 bps YoY); PAT ₹20.57 Cr; PCMB revenue tripled to ₹12 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue | ₹156.18 Cr | +20% | yoy · Q1FY27 · consolidated |
| EBITDA Margin | >21% | +638 bps | yoy · Q1FY27 · standalone |
| PAT | ₹20.57 Cr | point_in_time · Q1FY27 | |
| PCMB Revenue | ₹12 Cr | +200% | yoy · Q1FY27 |
| TP Buildtech Revenue | ₹19 Cr | point_in_time · Q1FY27 | |
| Oman Revenue | ₹9 Cr | point_in_time · Q1FY27 | |
| Capex (Q1) | ₹27 Cr | point_in_time · Q1FY27 |
Guidance
FY27 revenue guided at ₹670–700 Cr with EBITDA margin of 18–20%; MRP capacity expansion to 20,000 tpa on track for Q3 FY27.
What management committed to
- Tire crushing capacity in India will increase by 27% to 235,000 tons per annum by FY27. — 235,000 tons per annum, FY27
- Total capex of around ₹100 crores will be incurred across FY27 and FY28. — around ₹100 crores, FY28
- MRP capacity expansion of 3,500 tpa will be commissioned by Q3 FY27, taking total MRP capacity to 20,000 tons per annum. — 20,000 tons per annum, Q3FY27
- Tyre pyrolysis oil (TPO) facility at Varle will commence commercial sales in Q2 FY27 and stabilize by Q3 FY27. — commercial sales in Q2, stabilization by Q3, Q2FY27
- rCB production will commence in Q3 FY27, with commercial sales by Q4 FY27. — production Q3, sales Q4, Q3FY27
- PCMB division will contribute 10% of FY27 revenue. — 10%, FY27
- PP Build Tech business will grow over 30% and cross ₹100 crores in revenue in FY27. — >30% growth, >₹100 crores, FY27
- Steel Abrasive business will achieve approximately 50% volume growth in FY27. — approximately 50%, FY27
- Mbodla Investment (South Africa) will breakeven by Q2 FY27. — breakeven, Q2FY27
- South Africa Phase 2 full-scale tire recycling will start production in Q2 or Q3 FY27. — start production, Q3FY27
- Construction of the Saudi Arabia recycling facility will commence towards the end of calendar year 2026, subject to geopolitical normalization. — commence construction, Q3FY27
- FY27 consolidated revenue will be between ₹670 crores and ₹700 crores. — ₹670 – ₹700 crores, FY27
Key themes
Record margins, global expansion, Vision 2029
How the narrative shifted
- Record profitability and margin expansion: Management attributes the margin jump to structural improvements—raw material cost optimization, value-added product mix, and operational efficiency—and signals sustainability.
- Global capacity expansion and diversification: The company is aggressively expanding MRP, TPO, rCB, and PCMB capacities in India while entering new geographies (Chile, Saudi Arabia, scaling South Africa) to hedge supply and capture demand.
- Vision 2029 long-term ambition: Management reiterates the ₹1,000 Cr revenue target by FY29 with high growth and profitability metrics, framing the current capex as a stepping stone.
- Mix shift to value-added products: Increasing share of MRP, reclaimed rubber, PCMB, TPO, and rCB is driving both revenue growth and margin expansion, reducing dependence on commoditized crumb rubber.
- Geopolitical risk and hedging: West Asia conflict disrupts bitumen supply and consumer segment, but creates demand for rubberized bitumen; management uses geographic and product diversification to mitigate.
- EPR credits as steady income stream: EPR credits generate ₹25–30 Cr annual PBT contribution, now monetized regularly, and are presented as an integral part of the recycling business model.
- Raw material cost optimization: Improved feedstock optionality and sourcing strategies have lowered raw material costs, contributing to gross margin expansion.
Operational commentary
- MRP capacity expansion of 3,500 tpa on track to commission by Q3 FY27, taking total MRP capacity to 20,000 tpa.
- Tyre pyrolysis oil (TPO) facility at Varle began trials in Q1; commercial sales expected Q2, stabilization Q3. rCB production to start Q3, commercial sales Q4.
- PCMB division capacity increased to 18,000 tpa; utilization at 82%; expected to contribute 10% of FY27 revenue.
- PP Build Tech targeting >₹100 Cr revenue in FY27 with >30% growth; advanced stage of acquiring land in Western Maharashtra for new construction chemicals facility.
- Global Recycle Oman turned around with EBITDA margin of 8.53% in Q1; South Africa Phase 1 operational, exports begun, breakeven expected Q2; Phase 2 equipment on way, production expected Q2–Q3 FY27.
- Saudi Arabia: land allocated for 24,000 tpa recycling facility; construction expected to start end of calendar year 2026, subject to geopolitical normalization.
- Steel abrasives: exclusive distributorship from Zibo TAA (China) secured; ~50% volume growth targeted in FY27.
- Infrastructure: 15,000 tons rubberized bitumen processing order secured for FY27 execution.
- Renewable energy: 51% of total power from renewables in Q1; savings of ₹1.19 Cr; rooftop solar plants commissioned at Gummidipoondi (999 kW) and Varle (2,218 kW).
- R&D: ₹5 Cr allocated for FY27; dedicated team working on high-performance recycled rubber, engineered plastics, and recovered fiber from passenger tires.
Analyst Q&A
Q. Did inventory gains from bitumen prices contribute to the margin expansion?
Gaurav Sekhri: Very marginal. Nothing meaningful to report.
Q. Will the 22% EBITDA margin normalize in coming quarters?
Gaurav Sekhri: A lot of the margin improvement is systemic—raw material optionality, value-added product mix. Margins of 18-20% are sustainable, but front-ended costs from new expansions may blend to that range.
Q. Why enter Chile now instead of scaling existing international operations?
Gaurav Sekhri: Reasons are confidential and will not be shared on an open platform. Chile is a way to hedge end-of-life tire supply and make sourcing more robust.
Q. Where is the EPR monetization booked?
Abhay Kumar: It has been knocked off against unbilled revenue from prior years.
Q. What is the clean PAT excluding prior-year EPR monetization?
Gaurav Sekhri: The ₹21 Cr EPR monetization relates to previous financial year and has nothing to do with current-year profitability.
Q. How should we interpret the EBITDA margin guidance of 18-20% when Q1 delivered 22%?
Gaurav Sekhri: We prefer to be cautious because of front-ended costs. I will neither confirm we will achieve 18% nor 22%. Go by history of what we guided and delivered.
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