TVS Srichakra approves ₹49.20 crore to expand Eurogrip tyre capacity from January 2027, as rubber hits ₹290 a kg

TVS Srichakra, the Madurai company that sells two and three wheeler tyres under the TVS Eurogrip brand, told the stock exchanges on 17 October 2026 that its managing director has approved capital expenditure of ₹49.20 crore. The money is not for a new plant. It goes into line balancing and debottlenecking at the existing factories in Madurai, Tamil Nadu and Rudrapur, Uttarakhand, including more curing capacity, which is the stage where a green tyre is vulcanised into a finished one.

Autocar Professional reports the work is expected to add roughly 6 to 7 per cent to capacity, against a current annual capability of about 34 to 35 million tyres and utilisation running at 85 to 90 per cent. The extra capacity arrives in phases from January 2027, funded by a mix of debt and equity.

That utilisation figure is the real story. A plant running at 85 to 90 per cent has very little slack left for a festive quarter or a sudden order from a bike maker. Instead of waiting years for a greenfield line, TVS Srichakra is squeezing more out of what it already owns, which is the quickest and cheapest way to add two wheeler tyre volume. For riders, the practical effect is better availability of the common sizes at the dealer, the 90/90-17s and 110/70-17s that go on commuters and 150cc to 200cc bikes, rather than a new product on the shelf.

Rubber at a record makes the timing awkward

The expansion lands in the middle of a raw material shock. An ICICI Direct note dated 23 October 2026 puts RSS-IV grade natural rubber in India at a record ₹290 per kg, against ₹270 per kg in Bangkok, a premium of ₹20 per kg for an Indian buyer. Indian block rubber was quoted at ₹273 per kg in the same note, with international block rubber lower. Tight domestic supply, weather damage to tapping and strong demand from tyre plants are all pulling in the same direction.

Natural rubber is the single biggest input in a motorcycle tyre, and two wheeler tyres carry less value per unit than a truck radial, so there is less room to absorb the cost. Any sustained move at ₹290 per kg eventually shows up on the price board at your local tyre shop.

What CEAT's quarter tells you

CEAT, which supplies a lot of OEM rubber to Indian bike and scooter makers, reported Q2 FY27 numbers on 14 October 2026 and they show exactly this squeeze. Revenue from operations rose 26 per cent to ₹4,762 crore from ₹3,773 crore, yet consolidated net profit fell about 40 per cent to ₹112 crore from ₹186 crore. Total expenses climbed 29.8 per cent, faster than income, and there was a ₹13 crore exceptional charge for voluntary retirement. Basic earnings per share dropped to ₹27.79 from ₹45.98.

The half year is starker. H1 FY27 revenue was ₹9,080 crore, up 24.3 per cent, while H1 net profit fell 60.9 per cent to ₹116 crore. Volumes are clearly there. Margins are not.

What it means for an Indian rider

Two things follow. First, more Eurogrip capacity from January 2027 is good news if you have ever been told a size is on back order, and TVS Srichakra supplies both the aftermarket and OEM fitments. Second, if rubber stays near record levels, expect replacement tyre prices to creep up through FY27 rather than fall, whichever brand you buy. If you were planning to change a set of tyres this winter, there is a reasonable case for doing it sooner rather than later, and for checking the four digit date code on the sidewall so you are not paying current prices for old stock.

Sources

• TVS Srichakra to invest Rs 49.2 crore to expand tyre manufacturing capacity, Autocar Professional
• Natural rubber prices in India have reached a record high of Rs 290 per kg, ICICI Direct
• CEAT Q2 FY27 net profit falls 40% to ₹112 crore, revenue rises 26% to ₹4,762 crore, Free Press Journal