CMD Arvind Poddar’s Success Recipe for Balkrishna Industries

With origins in the textile business going back to 1951, Mumbai-based Balkrishna Industries (BIL) started as a bicycle tyre maker and then added auto rickshaw and car tyres to the mix. Arvind Poddar, the chairman & managing director of the company, succeeded his father Mahabirprasad Poddar who founded the family-run company. Today, it is one of the fastest-growing companies in the auto ancillaries sector. It not only manufactures and distributes OTR (off the road) tyres for agricultural and construction vehicles but has also pivoted to earth-moving and mining tyres along with those for all-terrain vehicles.

Poddar, who became the chairman in 2016, has been able to steer the company by adapting to changing times. Under him, the company’s performance was led by strong demand across geographies including Europe and the Americas leading to highest-ever volumes. It is slowly gaining market share in geographies, including the US. The company’s revenue grew to Rs 2,030 crore in Q3FY22 and its volumes grew 19 per cent year-on-year to 72,750 tonnes. Poddar is the winner in the Auto & Ancillaries category of the BT-PwC India’s Best CEOs ranking.

For Poddar, developing new and innovative solutions and continuously investing in R&D are key. A Motilal Oswal report, put out after the company’s Q2FY22 numbers, said that the demand momentum continues to remain strong on the back of strong economic activity. “It [BIL] can produce a maximum quantity of 285,000 tonnes/year from its current capacity. Additional growth would come from ongoing projects,” the report said. It added that it expects other expenses to remain at current levels for the remaining part of FY22. “It is taking a quarterly price hike and should maintain a 28-30 per cent operating margin annually on a long-term basis,” it said.

“Its competitive advantage is driven by competitive cost and pricing; consistent product portfolio expansion; and expanding reach,” the report said. With a current market share of nearly 6 per cent in the $15-billion global specialty tyres segment, BIL aspires to increase this to 10 per cent over the next 4-5 years. It has chalked out a capex of nearly Rs 1,900 crore over the next two years. “It would allocate Rs 800 crore for setting up new capacity, `650 crore for carbon black capacity expansion, and Rs 450 crore for plant automation,” the report said.

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