Tinna Rubber (TINNARUBR) Q2 FY27's Profit Slips 17% as Higher Costs Bite Into Record Growth
The recycled rubber leader posted a 31% revenue jump year-on-year, but a sequential profit decline points to rising costs and project expenses.
Tinna Rubber's Q2 FY27 shows strong annual growth but a quarterly profit squeeze. Revenue rose 31% YoY to ₹157 crore, yet profit fell 17% from the previous quarter as costs rose and new projects incurred expenses.
Tinna Rubber’s ambition to become the world’s largest integrated tyre recycler is being tested by the cost of getting there. The company delivered another quarter of powerful annual growth, but the path forward is now marked by rising expenses that squeezed profitability from the previous quarter.
The numbers tell a story of two speeds. Year-on-year, revenue surged 31% to ₹156.6 crore and profit jumped 45% to ₹17 crore. Sequentially, however, revenue was flat and profit fell 17%. The net profit margin contracted 230 basis points from the June quarter to 10.9%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Period | Sep 2026 | Jun 2026 | Sep 2025 |
| Revenue (₹ Cr) | 156.59YoY +31% | 156.18 | 119.52 |
| Profit (₹ Cr) | 17.04YoY +45% | 20.57 | 11.77 |
| Net Profit Margin (%) | 10.9YoY +11% | 13.2 | 9.8 |
Why margins narrowed after a record high
The profit dip from the stellar June quarter stems from a combination of higher operational costs and investments for the future. Reports from Equitybulls and Stockfin.ai note the company completed ₹45 crore of capital expenditure in the first half against a planned ₹100 crore spend over FY27 and FY28. These expansion costs, alongside a likely normalization of raw material benefits, weighed on the bottom line.
Growth itself was broad-based. According to Equitybulls, the infrastructure segment led with 38% yearly growth, followed by industrial (19%), consumer (11%), and steel (8%). This was driven by strong demand for recycled materials in road construction and from tyre makers seeking sustainable inputs.
The capacity race is on
Tinna is in a rapid build-out phase to meet its Vision 2029 goal of ₹1,000 crore revenue. A key 3,500 metric-tonne MRP expansion is on track for commissioning by Q3 FY27, which will make it the world’s largest producer of micronised rubber powder. The company also plans a massive ₹250 crore integrated recycling facility in Andhra Pradesh over three years.
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· TINNARUBR
(BSE)
ISIN: INE015C01016
These projects promise higher future volumes but bring near-term execution costs and complexity. Management, cited by Equitybulls, remains confident, targeting over 25% revenue CAGR and sustained EBITDA margins above 18% through this period.
Key Points
- Revenue growth remained robust at 31% year-on-year, fueled by strong demand across infrastructure and industrial segments.
- Sequential profit declined 17% as capital expenditure and operational costs rose, compressing the net profit margin.
- The company is aggressively expanding capacity, including a major MRP line due this quarter, to support its long-term ₹1,000 crore revenue target.
- Balance sheet strength improved, with net debt-to-equity falling to 0.32x in H1 FY27 from 0.40x in FY26.
- The stock trades at a P/E of 18.2, a discount to the industry average of 21.1, reflecting the market's caution on near-term margin pressures.
Hexa Perspective
Tinna Rubber’s quarter confirms the structural demand for recycled rubber is intact, but also that scaling a capital-intensive, integrated model is costly. The annual growth story is compelling, yet the sequential profit squeeze shows that margin discipline will be tested as capex ramps up.
The coming quarters will hinge on two things: the timely and efficient commissioning of new capacity, and the company's ability to pass on input cost increases. Investors are getting growth at a discount, but the valuation gap acknowledges the execution risk inherent in such an ambitious expansion plan.
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