Indian tire industry projected to grow 7-8% in FY26
What's the story
The Indian tire industry is projected to witness a growth of 7-8% in the current fiscal year, driven mainly by replacement demand. Anshuman Singhania, Managing Director of JK Tyre & Industries, said that the sector remains export-heavy with outbound shipments crossing ₹25,000 crore in FY25. Despite muted original equipment (OE) offtakes, he expects that strong domestic replacement demand will drive this growth.
Factors influencing growth
Investments and consumer sentiment
Singhania attributed the expected growth to consistent investments in capacity expansion, manufacturing efficiency improvements, and an increased focus on enhancing research and development (R&D) capabilities. He also said that with the festive season approaching, along with recent repo rate cuts and favorable monsoon conditions, consumer sentiments are likely to improve further.
Market expectations
Demand momentum and raw material costs
Apollo Tyres CFO Gaurav Kumar also expects demand momentum to improve in the second half of this fiscal year. He said this is due to a rebound in infrastructure and mining segments post-monsoon. However, he added that while raw material costs are expected to be slightly lower in Q2 compared to current levels, there is some uncertainty over prevailing exchange rates.
Market trends
Two-wheeler growth and festive demand
ICRA Senior Vice President & Co-Group Head (Corporate Ratings) Srikumar Krishnamurthy said domestic tire demand from Original Equipment Manufacturers (OEMs) in commercial and passenger vehicle segments is likely to lag behind two-wheeler growth. He added that replacement demand, which constitutes the largest share of the tire industry, will be supported by favorable rural sentiments, festive demand, and expected rate cut effects on consumption.
Export challenges
Export headwinds and CRISIL Ratings report
Krishnamurthy also warned that exports could face headwinds from ongoing geopolitical developments and uncertainties around US tariffs. A report by CRISIL Ratings echoed similar sentiments, predicting a revenue growth of 7-8% for the domestic tire industry this fiscal year. The growth is expected to be driven by replacement demand, which accounts for half of annual sales.