Tinna Rubber: Navigating Growth with Strategic Focus in H1 FY26

Tinna Rubber And Infrastructure Limited, a prominent player in the recycled rubber sector, recently unveiled its Q2 and H1 FY26 financial results, showcasing a strategic pivot towards profitability and sustainable growth amidst a dynamic market landscape. The company's consolidated operational income for H1 FY26 stood at INR 250 crores. Despite a modest 2% year-on-year dip in operational income for H1 FY26, the company demonstrated robust financial health, with EBITDA strengthening to 18.5% in Q2 FY26 and maintaining 17% for H1 FY26. This performance underscores management's disciplined approach to enhancing margins by selectively curtailing sales of low-margin, commoditized products and focusing on value-added offerings.

The segment-wise performance for H1 FY26 revealed a nuanced picture. The Industrial and Steel segments delivered revenue growth, with the Industrial segment witnessing a healthy 19% year-on-year growth, supported by a 7% rise in exports and a strong order pipeline. Micronized rubber powder and reclaim rubber volumes expanded by 20% and 4% respectively. The Steel segment also showed encouraging growth, with revenue rising 6% year-on-year, driven by a 21% increase in sales volume. However, the Infrastructure segment experienced a dip in revenue due to a strategic focus on value-added products and the impact of an extended monsoon. The Consumer segment remained largely stable despite a marginal drop in volumes, reflecting price corrections and seasonal shifts. The company's associate, TP Buildtech, reported a PAT of INR 98 lakhs in H1 FY26, a 50% year-on-year decline attributed to higher costs incurred in launching new products and stabilizing its new Kolkata unit.

Here is a financial summary of Tinna Rubber's consolidated performance:

Strategic Initiatives and Global Expansion

Tinna Rubber is aggressively pursuing strategic initiatives to bolster its market position and drive future growth. A significant focus is on expanding its renewable energy capacity, aiming to more than triple it from 1.23 MW to 4.48 MW. This initiative is expected to generate total savings of INR 3.9 Cr+ in FY26 and contribute to 50% of the company's total power consumption by the end of the financial year. The company is also enhancing its optionality in sourcing various types of End-of-Life Tyres (ELTs), which is projected to yield 10-15% cost savings on raw materials.

International expansion remains a key pillar of Tinna's strategy. The Oman plant is operating at 85% capacity utilization, with 40% of its output sold within the GCC region. To counter a temporary dip in operating margins due to increased raw material prices, the company has secured consent to import ELTs into Oman, expecting margin recovery in H2. In South Africa, the joint venture Mbodla Investments Pty Ltd, having completed Phase 1 capex, is on track to break even by March 2026. Furthermore, Tinna has outlined plans to establish a tyre recycling plant in Saudi Arabia with an initial capacity of 24,000 MT per annum, with operations targeted to commence by mid-FY27. This expansion aims to leverage Saudi Arabia's position as the largest economy in the GCC region.

Innovation and Future Readiness

The company's commitment to innovation is evident in its Recovered Carbon Black (rCB) project, which is on track for commissioning, with trials scheduled to commence by the end of Q3. This project, with an estimated cost of INR 50 crores, is expected to contribute INR 100-125 crores to the top line by FY27 and has a projected payback period of 4-5 years. Tinna has invested in major equipment upgrades and onboarded skilled professionals to ensure the production of high-quality rCB, focusing on both rubber and non-rubber segments. Additionally, Tinna's Polymer Compounding Solutions business has commenced production and sales, contributing about 3% to H1 FY26 turnover, with a diversified customer base across key industries like multilayer packaging films, shoe soles, and automotive components.

In a testament to its pioneering efforts, Tinna Rubber was honored with the prestigious Innovation Award 2025 by the Rubberized Asphalt Foundation in Lisbon, Portugal, recognizing its contribution to the development of rubberized asphalt business in India. The company has also initiated a comprehensive lifecycle assessment study to measure greenhouse gas emissions from tyre recycling, expected to be completed by Q4 FY26, and has allocated up to 3% of its PAT towards R&D expenditure to foster a research-led and innovation-driven organization.

Outlook and Conclusion

Looking ahead, Tinna Rubber is confident in its growth trajectory. Management expects a revenue growth of 12-15% for FY26 over the previous year. Exports are targeted to achieve a strong 30% volume increase by Q4 FY26. The company's Vision 2028 aims for a revenue CAGR of over 25% to reach INR 1,000 crores, with sustained EBITDA margins above 18% and ROCE of 30%. The strategic decision to prioritize margin expansion through value-added products and cost-saving initiatives, coupled with its robust global expansion plans and commitment to sustainability, positions Tinna Rubber for sustained long-term growth. The company's upgraded CARE BBB- credit rating further underscores its improved financial risk profile, reinforcing investor confidence in its strategic direction and execution capabilities.