Balkrishna Industries Joins Hands With Pirelli for 50:50 Tyre Joint Venture

Key numbers

PE TTM	28.05Sector 32.04
Market Cap	₹39,429 CrMid-range Performer
1-Yr Change	-10.66%Price Performance
Operating Margin	21.54%Q1 FY27

Key highlights

• Formation of a 50:50 joint venture for passenger car radial (PCR) tyre manufacturing in India
• JV incorporation deadline set for December 31, 2030, with a new manufacturing plant planned
• Offtake agreement for BKT to manufacture Pirelli-branded tyres at its Bhuj, Gujarat facility
• Pirelli to provide technical support and testing services for BKT-branded SUV and passenger tyres
• Partner Pirelli Tyre S.p.A. reported consolidated revenue of EUR 6.78 billion in FY25

BKT and Pirelli Execute Framework Agreement for 50:50 Joint Venture

Balkrishna Industries Limited (BKT) entered into a comprehensive framework agreement with Italy-based Pirelli Tyre S.p.A. on October 22, 2026. The agreement outlines the structure for a future 50:50 joint venture dedicated to manufacturing passenger car radial (PCR) tyres in India.

While the joint venture company is slated for incorporation by December 31, 2030, the partnership establishes an immediate operational roadmap. This strategic move aligns with BKT’s recent branding initiatives, including its March 2026 tyre partnership with eight IPL franchises, as it seeks to diversify from its core off-highway tyre business into the competitive passenger vehicle market.

Manufacturing Offtake at Bhuj and Technical Support Terms

• BKT will manufacture Pirelli-branded PCR tyres at its existing plant in Bhuj, Gujarat
• Pricing is based on actual raw material costs plus conversion costs for both domestic and export supply
• Pirelli will grant BKT a non-exclusive right to use specific know-how and trademarks at the Bhuj facility
• Pirelli will provide technical support for BKT-branded SUV and two-wheeler tyres using international proving grounds
• A five-year lock-in period applies to JV shares with right-of-first-refusal and tag-along rights thereafter

Strategic Entry into High-Value Passenger Car Segment

For BKT, the agreement supports its expansion into the passenger car segment, a move aimed at creating new opportunities in domestic and international markets. The company has previously guided for a revenue target of ₹5,000 crore from the newly entered on-highway segment by FY30. In its latest financial results for the quarter ended June 30, 2026, BKT reported a 25.19% year-on-year growth in operating revenue to ₹3,455.27 crore.

Net profits for the same period rose 56.35% to ₹450.77 crore, while operating margins improved to 21.54% from 18.3% four quarters ago.

Partner Scale and Exclusivity Clauses

Pirelli, part of a global group with EUR 6.78 billion in annual revenue, is reinforcing its position in India through this tie-up. Under the exclusivity terms, Pirelli has committed to a minimum offtake and agreed not to enter into similar production agreements with other third parties in India for Pirelli-branded PCR tyres. Conversely, BKT has agreed not to manufacture comparable tyres for third parties that compete with Pirelli PCR tyres, though it remains free to develop and market its own BKT-branded PCR range.

This partnership follows BKT’s 2025 extension of its official tyre partnership with LALIGA through 2028.

What to watch next

• Commercial rollout of passenger car radial tyres with 6,700/day capacity: Late 2026
• Declaration of financial results for the second quarter ended September 30, 2026: Expected late October 2026
• Incorporation of the 50:50 Joint Venture company: Target by December 31, 2030

Balkrishna Industries · financial snapshot

Share price	₹2039.6
Market capitalisation	₹39,428.98 Cr
Revenue (annual)	₹10,823.08 Cr
Net profit (annual)	₹1,243.10 Cr
Revenue (latest quarter)	₹3,455.27 Cr+17.81% vs previous quarter
Net profit (latest quarter)	₹450.77 Cr+50.53% vs previous quarter
P/E (TTM)	28.05×Sector 32.04×
Promoter holding	58.29%0.00% QoQ
FII holding	9.06%Current quarter

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.