Indag Rubber reports revenue drop in Q3 FY25 amid rising raw material costs

Indag Rubber Limited, a leading manufacturer in the retreading solutions market, has reported a decline in revenue for the third quarter (Q3) and nine months (9M) of fiscal year 2025. The company’s total revenue for Q3 FY25 stood at ₹55.9 crore, down from ₹64.7 crore in Q3 FY24, reflecting a slowdown in the tyre industry growth. Similarly, its revenue for the first nine months of FY25 was ₹179.0 crore, compared to ₹197.4 crore in the same period last year.

The financial downturn has been attributed to rising raw material costs, prolonged monsoons, and reduced infrastructure capital expenditure, all of which have affected mobility and fleet operations.

Profitability Under Pressure Due to Rising Costs

Indag Rubber’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) for Q3 FY25 fell to ₹2.6 crore from ₹6.5 crore in the previous year’s quarter, resulting in an EBITDA margin of 4.7% compared to 10.1% in Q3 FY24. Meanwhile, profit after tax (PAT) for Q3 FY25 declined significantly to ₹0.8 crore, with a PAT margin of 1.4%, compared to ₹3.6 crore and 5.6% in the prior year’s quarter.

The company’s CEO, Vijay Shrinivas, acknowledged the financial strain caused by raw material cost pressures but highlighted Indag Rubber’s strategic focus on its retreading solutions market, particularly targeting the domestic aftermarket segment through its franchisee retreaders and dealers.

Strategic Focus on Sustainability and Market Expansion

Despite current setbacks, Indag Rubber remains optimistic about its future. The company believes that the increasing emphasis on sustainability, driven by Extended Producer Responsibility (EPR) regulations in the tyre industry growth, will drive greater adoption of retreading solutions. Additionally, rising fuel prices and higher operational costs have made fleet operators more inclined toward cost-effective alternatives like tyre retreading, a trend that could enhance fleet operators profitability.

The company has outlined several key strategies for growth in Q4 FY25 and FY26, including:

• Strengthening its dealer and fleet owner network at the grassroots level.
• Expanding the market for retreading solutions among cost-conscious fleet operators.
• Capitalising on regulatory changes that favour sustainable practices in the tyre industry growth.
• Leveraging its strong distribution network to boost market penetration.

Positioning for a Market Recovery

With the rising costs of new tyres and an increased focus on sustainability, Indag Rubber is positioning itself to benefit from the expected market recovery. The company aims to provide fleet operators with high-quality, cost-effective retreading solutions that align with economic and environmental concerns.

While the short-term outlook remains cautious due to macroeconomic factors, Indag Rubber remains committed to delivering long-term value for stakeholders by focusing on operational efficiency, sustainability, and customer-centric initiatives.