• Raw material inflation: Input costs rose approximately 20% quarter-on-quarter in Q1 and are expected to increase an additional 6–7% in Q2 due to high natural rubber and crude prices, before stabilizing in Q3.
• Pricing mitigation strategy: To counter margin contraction, the company implemented staggered price hikes across replacement markets, anticipates a ~12% realization improvement in OEMs in Q2 following a one-quarter lag, and raised international prices by 5% in dollar terms.
• Sri Lanka exposure: Foreign exchange losses hit pre-tax profit due to unhedged Sri Lankan operations, prompting board approval to convert $24.5 million of debt into equity to achieve a 1:1 debt-equity ratio and reduce future currency volatility.
• Capex and expansion: Full-year capex guidance is maintained at 1,300 to 1,400 crore rupees, including expanding Nagpur capacity to 100,000 tires per day by Q3/Q4 and investing 1,205 crore rupees in a new facility targeted for the second half of FY28.
• Margin recovery outlook: Standalone EBIT margins fell to 9.13% in Q1 but are expected to recover to historical 13–14% levels as price increases take effect and operational control of the Camso business scales to 100% by Q3.