Tyre industry set for 7-8% growth in FY26 on strong replacement demand

The domestic tyre industry is likely to register a 7-8 per cent growth in the current fiscal on the back of replacement demand, according to people tracking the sector.

JK Tyre & Industries MD Anshuman Singhania said the Indian tyre industry remains an export-heavy manufacturing sector, with outbound shipments surpassing Rs 25,000 crore in FY25.

The growth is attributed to consistent investments in capacity expansion, improvements in manufacturing efficiency and increased focus on enhancing the R&D capabilities, he noted.

Apollo Tyres CFO Gaurav Kumar told analysts that the company expects the demand momentum to improve in the second half of the fiscal year, with a rebound in infrastructure and mining segments post-monsoon.

Icra Senior Vice President & Co-Group Head (Corporate Ratings) Srikumar Krishnamurthy said domestic tyre demand from Original Equipment Manufacturers (OEMs) in commercial and passenger vehicle segments is likely to lag the growth in two-wheelers.

However, exports are likely to face headwinds from ongoing geopolitical developments and uncertainties around US tariffs, he stated.

Crisil Ratings, in a report, said the domestic tyre industry is likely to witness revenue growth of 7-8 per cent this fiscal, driven by replacement demand, which accounts for half of annual sales.

The segment is estimated to post growth even as offtake by original equipment manufacturers is likely to be subdued, it stated.

It also noted that the rising premiumisation is expected to give a slight leg-up to realisations.