Tolins Tyres Limited, a prominent player in the tire industry, has recently clinched a significant order from The Institute of Road Transport (IRT), marking a substantial boost to its order book. The company, known for its commitment to safety and durability in tire manufacturing, has secured a contract valued between Rs 40-50 crores, showcasing its strong market position and product demand.

Contract Details

Key Highlights

• Strategic Win: This order reinforces Tolins Tyres' position in the commercial vehicle tire segment, particularly in the public transport sector.
• Product Range: The contract encompasses a variety of products crucial for tire retreading and maintenance, indicating the company's diverse product portfolio.
• Long-term Engagement: With a duration extending potentially beyond March 2026, this contract provides Tolins Tyres with a stable revenue stream for the foreseeable future.
• Domestic Focus: The order, being domestic in nature, aligns with the company's strong presence in the Indian market.

Transparency and Compliance

In line with regulatory requirements, Tolins Tyres has confirmed that:

• The promoters have no interest in the awarding entity (IRT).
• The transaction does not fall under related party transactions.

This disclosure aligns with the company's commitment to transparency and adherence to SEBI regulations.

Market Implications

This substantial order may have positive implications for Tolins Tyres Limited:

• Revenue Boost: The contract value of Rs 40-50 crores is expected to contribute to the company's top line.
• Market Confidence: Securing a contract with a state transport body may enhance the company's credibility and potentially lead to similar orders from other states.
• Capacity Utilization: The order may improve the company's capacity utilization, potentially leading to better operational efficiency.

As Tolins Tyres Limited moves forward with this contract, investors and market watchers will be keen to observe its impact on the company's financial performance and market position in the coming quarters. The successful execution of this order could pave the way for more such contracts, further strengthening the company's foothold in the commercial tire segment.

Tolins Tyres , a prominent player in the tyre industry, has unveiled its strategic financial goals for the coming years, aiming to boost profitability and diversify its product portfolio. The company's shares closed 2.28% higher at Rs 192.50, reflecting positive market sentiment towards these ambitious targets.

Financial Targets

Sankarakrishnan Ramalingam, Whole Time Director of Tolins Tyres, announced that the company is targeting EBITDA margins of 17% to 20% over the next two to three years. Additionally, the company aims to achieve PAT margins of 10% to 11.5% within the same timeframe.

Revenue Diversification Strategy

Tolins Tyres is implementing a balanced approach to its revenue streams:

• The company plans to equilibrate its revenue sources between its traditional retreading business and the new tyre segment within three years.
• Tolins is targeting a 50-50 revenue split between these segments, with a possibility of a slight tilt towards new tyres at 45-55%.
• The company aims to achieve 70% capacity utilization to support this growth.

Product Portfolio Expansion

To support its growth strategy, Tolins Tyres has significantly expanded its new tyre portfolio:

• Previously focused on two-wheelers, the company has now diversified into:
  • Three-wheeler tyres
  • SUV tyres
  • Agricultural tyres

Growth Projections

Despite potential market fluctuations, Ramalingam expressed confidence in the company's growth trajectory:

• Tolins Tyres expects to maintain a 20-25% revenue CAGR under various market conditions.

GST Impact and Advocacy

The company has welcomed recent changes in the GST structure and is pushing for further reforms:

• Tolins Tyres appreciated the GST reduction on tyres from 28% to 18%.
• The company is advocating for a GST reduction in the retreading sector from 18% to 5%.

These strategic initiatives and targets demonstrate Tolins Tyres' commitment to growth and profitability in the competitive tyre market. The company's focus on diversification, capacity utilization, and margin improvement suggests a comprehensive approach to enhancing its market position in the coming years.