New Delhi: A stronger international brand image, access to European testing infrastructure and a steady revenue stream from manufacturing 800,000 passenger car tyres annually for the Italian tyre maker are three benefits Mumbai-based Balkrishna Industries Ltd expects from its partnership with the world's fifth largest tyre maker Pirelli, joint managing director Rajiv Poddar told Mint.
Under an initial supply agreement signed last month, its Bhuj plant will build 800,000 tyres a year by 2030. The two companies could later form a 50:50 joint venture to make premium car tyres, if certain conditions are met.
“It's a marriage of two equals in that sense. When they saw what we've done in Europe, the quality-centric approach that we have, they saw a possibility of a strategic alliance.”
Balkrishna wants to reach revenue of ₹23,000 crore by FY30, with tyres for road vehicles contributing 20%. It is also becoming less dependent on exports, which made up 64% of sales in FY26, down from 82% in FY22.
For BKT the deal is a step into a much bigger market: cars, trucks and buses.
The partnership also provides BKT with access to Pirelli's testing infrastructure in Europe, including simulation and proving-ground facilities. This may come in handy as the Indian company develops its own passenger car tyres and seeks to establish their performance in international markets.
BKT's expansion into on-road tyres comes amid a broader trend of tyre manufacturers diversifying their product portfolios. While BKT is seeking to enter passenger car tyres and build a presence in commercial vehicles, rival Ceat Ltd acquired Canadian off-highway tyre brand Camso in 2024 to strengthen its position in the global off-highway market. JK Tyres has also said that it is looking for acquisition opportunities.
Known in Europe
Poddar said Pirelli's decision to partner with BKT reflected the Indian company's established presence in Europe, its manufacturing capabilities and its track record of building a premium brand in the off-highway segment. Off-highway tyres are designed for vehicles that use rough roads.
The company believes the association with a premium European brand will help it gain acceptance among customers as it enters a segment where it has limited experience. It will also allow BKT to accelerate its market entry without having to build every capability independently.
“We have got a large market share in agriculture in Europe, practically a leadership position, and that itself has also translated into brand value and close to premium brand perception,” Poddar said.
This arrangement is covered by a separate services agreement, under which BKT will pay for the use of Pirelli's facilities and technical support. However, this does not involve BKT adopting Pirelli's technology for its own products. The two companies will maintain separate manufacturing specifications and technology.
"For the BKT brand of tyres, BKT does not have its own race track. So they will open up their infrastructure in Europe," he said.
“Whether it is simulation technology or proving ground technology, we can use their facilities for consideration. They will help and support us to get quick results back.”
Rajiv Poddar represents the third generation of the family behind Balkrishna Industries. His grandfather, Mahabirprasad Poddar, started a bicycle tyre business in 1954. His father, Arvind Poddar, founded Balkrishna Industries in 1987, building it into a manufacturer of off-highway tyres. Its market cap is around ₹47,000 crore.
Analysts watch the margins
The offtake agreement for the tyres gives BKT a manufacturing customer as it enters the passenger car segment. Under the arrangement, Pirelli will procure the tyres from BKT and sell them under its own brand. The agreement does not involve BKT sharing in Pirelli's sales revenue.
The proposed joint venture, if it materialises, will manufacture tyres for both brands, with each company selling its products independently.
While most of the initial offtake is expected to be for India, a portion could be supplied to overseas markets, according to the top executive.
Poddar said the partnership would help BKT accelerate its broader on-road ambitions, although it would not change the company's stated targets or timelines.
Analysts have said that the strategy to expand into on-road tyres will be closely watched, as it could drag down the market.
“Foray into the PCR/TBR segments is likely to be closely monitored for the pace at which it gains material traction, and whether margins and returns will be materially dilutive in the long run,” analysts at Motilal Oswal said in a note. PCR means car tyres; TBR means truck and bus tyres.
The diversification is part of a broader effort to reduce its dependence on global demand for off-highway tyres. BKT's international markets contributed 64% of its sales in FY26, down from 71% a year earlier and 82% in FY22.