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.

Tolins Tyres , a leading player in the Indian tyre industry, has announced a significant expansion of its agricultural product lineup with the launch of heavy-duty tractor rear tyres. This strategic move aims to provide a comprehensive tyre solution for tractors, complementing the company's existing range of tractor trailer tyres, front tyres, and tiller tyres.

New Product Launch

The newly introduced heavy-duty tractor rear tyres are set to hit the market in late September. Tolins Tyres plans to distribute these products through its extensive network of over 1,200 dealers across India, ensuring wide availability for farmers and agricultural businesses.

Management's Perspective

Sankarakrishnan Ramalingam, Whole Time Director of Tolins Tyres, emphasized the significance of this launch, stating that it provides a comprehensive tyre solution for tractors. This move aligns with the company's strategy to strengthen its position in the agricultural vehicle segment.

Business Strategy and Revenue Shift

Currently, Tolins Tyres' revenue composition is heavily tilted towards retreading materials, which account for 60-65% of the company's income, while new tyres contribute 35-40%. However, the management has outlined an ambitious plan to rebalance this ratio:

• Target: Shift the revenue ratio to 50-50 or 45-55 in favor of new tyres over the next few years.
• Focus Areas: Agricultural vehicles, Light Commercial Vehicles, and 2/3 wheelers.

Production Capacity and Expansion

Tolins Tyres has significantly ramped up its production capabilities:

This substantial increase in production capacity was achieved through the acquisition of a Kochi plant in 2023. The company is optimistic about its growth prospects, expecting to reach 70-80% capacity utilization within two to three years, leveraging the funds raised from its recent Initial Public Offering (IPO).

IPO Success

The market has shown strong confidence in Tolins Tyres' growth strategy:

• The IPO was fully subscribed within hours of opening.
• By the end of the first day, the IPO was oversubscribed by 1.80 times.

This enthusiastic response from investors underscores the market's positive outlook on Tolins Tyres' expansion plans and its position in the agricultural and commercial vehicle tyre segment.

As Tolins Tyres gears up to launch its new heavy-duty tractor rear tyres, the company appears well-positioned to capitalize on the growing demand in the agricultural sector while diversifying its revenue streams. The success of this strategy could potentially reshape the company's market presence and financial performance in the coming years.