Balkrishna Industries Ltd

Dear Shareholders,

It gives me great pleasure to present our Annual Report for 2021-22. Our success over the past six decades is a testimony to the quality of our people, products, strong relationships with our stakeholders and the strength of our brand at a global level. Besides, quality and innovation, strong leadership have further allowed us to build a resilient business model and emerge as a globally renowned brand with a strong market share.

How the year unfolded?

At the start of the year, we faced great uncertainty across our markets due to the second wave of COVID. The well-being of our employees continued to remain a priority while ensuring

business continuity. Despite the enormous challenges of operating through COVID-19, our team worked tirelessly to ensure that we meet the needs of our customers. As the year unfolded further, the geopolitical situation created unprecedented supply chain related disruptions, impacting both pricing as well as raw materials availability. The logistics and freight costs continued to remain at elevated levels. But on a positive side, our end user markets were buoyant despite inflationary trends. As in the past we gained market share as the off-highway tire industry witnessed higher uptake on an account of healthy demand across mining and agricultural markets.

Performance

Our performance in 2021-22, demonstrates the outcome of our long-term strategy to capitalise on our increasing scale while, at the same time, maintaining the business agility. We reported strong revenues of Rs 8,697 Crores and volumes of 2,88,795 MTPA, both growing annually by 46% and 27% respectively. Our EBITDA increased by 23% and stood at Rs 2,406 Crores with strong margins of 27%. The profit after tax increased by 22% and stood at Rs 1,411 Crores.

Exports accounts for 83% of our sales out of which 54% is Europe, 17% is US and rest of the world is 12%. The remaining 17% is domestic sales. We continued to remain the preferred choice of our customers and we further aim at maintaining leadership in product quality, delivery reliability and technical expertise.

Progress on OUR Capex

During the year, we made significant progress with our capex plan. We commissioned the greenfield plant at Waluj (Waluj 2) during the year. Further, We also commissioned the brownfield tire plant at Bhuj (almost 6 months ahead of schedule) and are expecting a complete ramp up in production by second half of 2022-23. Post commissioning of these capacities and at full ramp up, we will achieve a total capacity profile of 3,60,000 MTPA. For FY23, we are targeting sales volume of 3,20,000 MT to 3,30,000 MT

People and Community

At BKT, we foster a diverse and inclusive work environment across our areas of operations. We have always focused on diversity and inclusion and providing equal growth opportunities to our team. The result is visible in the success we have achieved over the years. We always value employee feedback and always strive to create a workplace where everyone feels welcome, supported and valued.

Running our business responsibly is vital to our long-term success, as the decisions we make may have consequences for the economy, society and the environment. Our approach to corporate social responsibility and our initiatives in promoting education, health and rural development adds

value to a larger section of the society. Besides our all-round efforts around Environmental, Social and Governance (ESG) factors and dedicated targets, further drives the business sustainability.

Strategic Way Ahead

In the first half of the seventh decade, we are now embarking on a mission to double our global market share from ~5.5% to 10%. We shall continue to expand our capacities to achieve this mission.

This would be aptly supported by our strategic endeavours towards enhancing market reach, improving penetration in the US markets, expanding product portfolio, strengthening distribution channel in the Indian markets and increasing utilisation levels. Besides, we will continue to build our brand visibility by associating with several sports events across the globe.

Closing Note

I wish to take this opportunity to thank my colleagues on the Board for their invaluable guidance and support. My sincere appreciation also goes out to our management and execution team for their untiring efforts and commitment. Finally, I wish to extend my appreciation to all our stakeholders who have been a key support to our growth over the years. Notwithstanding

the near-term uncertainties, it is truly an outstanding time to be part of this industry and we are excited about the opportunities and the next leg of our growth. We have delivered 60 years of excellence and we consider this is only the beginning.