💰 Financial Performance

Revenue Growth by Segment

Standalone revenue declined 9.1% in FY2025 to INR 224.82 Cr, primarily due to lower demand in the aftermarket segment and reduced business from State Transport Corporations (STC). Q1 FY2026 revenue declined 19% YoY to INR 48 Cr, while Q2 FY2026 revenue grew 15% QoQ to INR 55 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company maintains a pan-India distribution network and exports via the 'Zoma' brand.

Profitability Margins

Standalone Operating Profit Margin (OPM) contracted from 7.1% in FY2024 to 2.0% in FY2025 and 2.2% in Q1 FY2026. Net Profit Margin was 3.74% in FY2025, down from 6.67% in FY2024. Q2 FY2026 PAT margin improved to 6.5%.

EBITDA Margin

Standalone EBITDA margin was 11.3% in Q2 FY2026, representing a 300 bps expansion QoQ from 8.3% in Q1 FY2026. Consolidated OPM was significantly lower at 0.7% in FY2025 due to cash burn in the Millenium subsidiary.

Capital Expenditure

Historical capacity expansion at the Nalagarh plant increased capacity from 13,800 MT to 20,000 MT in 2016. No major standalone capex plans were reported for FY2026, with current focus on scaling the Millenium subsidiary.

Credit Rating & Borrowing

Ratings downgraded in August 2025 to [ICRA]A- (Negative) from [ICRA]A (Negative) and short-term rating to [ICRA]A2+ from [ICRA]A1. The company remains debt-free at a standalone level.

⚙️ Operational Drivers

Raw Materials

Natural Rubber and Synthetic Rubber are the primary raw materials, with natural rubber price spikes being the main driver of margin contraction.

Import Sources

Natural rubber is sourced/imported from Thailand and Malaysia.

Capacity Expansion

Current installed capacity is 20,000 MTPA at the Nalagarh, Himachal Pradesh facility. No specific planned expansion timeline for the core rubber business was disclosed.

Raw Material Costs

Standalone cost of materials consumed was INR 157.40 Cr in FY2025, representing 69.9% of standalone revenue. Elevated rubber prices led to a sharp decline in OPM from 7.1% to 2.0% YoY.

📈 Strategic Growth

Expected Growth Rate

5.24%

Growth Strategy

Growth is targeted through diversification into contract manufacturing of Power Conversion Systems (PCS) via the 51% subsidiary Millenium for a global energy company. The company is also focusing on exports and increasing awareness of retreading as a 70% cost-saving alternative to new tyres.

Products & Services

Precured Tread Rubber, Un-vulcanized Rubber Strip Gum, Universal Spray Cement, and Retreading Envelopes.

Brand Portfolio

Indag, Zoma (for foreign markets).

New Products/Services

Power Conversion Systems (PCS) for the renewable energy sector via Millenium Manufacturing Services.

Market Expansion

Expansion into the green energy sector and increased focus on foreign markets via the Zoma brand.

Market Share & Ranking

Not disclosed in available documents, though the company is a leading player in the organized retreading segment.

Strategic Alliances

51% subsidiary Millenium Manufacturing Services Private Limited (formerly Indergy Power Systems).

🌍 External Factors

Industry Trends

Truck and Bus radialization has reached ~60%; Extended Producer Responsibility (EPR) policy and anti-overloading regulations are expected to drive growth in the organized retreading sector.

Competitive Landscape

Intense competition from unorganized regional players and major tyre OEMs (e.g., MRF, Apollo) that have established their own retreading verticals.

Competitive Moat

Durable advantages include a strong brand track record since 1978, a pan-India network of 3,000+ retreaders, 300+ dealers, and technical know-how from its former JV with Bandag (USA).

Macro Economic Sensitivity

Highly sensitive to Commercial Vehicle (CV) market growth, which is projected at a 5.24% CAGR through FY2033.

Consumer Behavior

Fleet owners are increasingly adopting retreading as a cost-saving measure (1/3 the cost-per-KM of new tyres) and a sustainable alternative.

Geopolitical Risks

Red Sea crisis, Russia-Ukraine war, and U.S. tariffs are cited as factors affecting global trade flows and commodity pricing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by anti-overloading regulations, GST implementation, E-way bill requirements, and tyre labeling norms.

Environmental Compliance

The company is subject to Extended Producer Responsibility (EPR) policies and waste management regulations.

Taxation Policy Impact

Effective standalone tax rate was approximately 19.1% in FY2025 (INR 2.00 Cr tax on INR 10.41 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (natural and synthetic rubber) remains the primary risk to profitability, with OPM sensitivity demonstrated by a 510 bps drop in FY2025.

Geographic Concentration Risk

Operations are concentrated in India with manufacturing facilities in Himachal Pradesh and Rajasthan.

Third Party Dependencies

High dependency on rubber production in Thailand and Malaysia for key inputs.

Technology Obsolescence Risk

Increasing radialization requires continuous technical upskilling to maintain casing recovery rates and retreading quality.

Credit & Counterparty Risk

Exposure to State Transport Undertakings (STUs) which operate on a discrete tender basis, leading to revenue volatility.