JK Tyre & Industries Ltd
NSE:JKTYRE
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Earnings Call Analysis
Q1-2025 Analysis
JK Tyre & Industries Ltd
JK Tyre has commenced the fiscal year 2025 with a promising first quarter, recording a net profit of INR 212 crores. This reflects a remarkable year-on-year growth of 33%. The significant enhancement in operating margin indicates strong performance despite facing challenges in revenue growth, primarily due to reduced OEM sales and demand fluctuations in the commercial vehicle market.
Overall revenue remained flat compared to the previous year, with OEM sales dropping approximately 5%-6%. However, the company witnessed a robust expansion of exports, increasing by 19%, which helped to somewhat stabilize the total revenue picture. In contrast, the replacement segment sales posted no significant change.
Despite current fluctuations, the tire industry shows optimism driven by supportive government reforms and infrastructure development plans. The upcoming festive season and favorable monsoon conditions are expected to boost demand. Notably, commercial vehicle (CV) and passenger vehicle segments recorded low single-digit growth, with a significant recovery expected in the latter half of the fiscal year.
The company has adopted a strategic focus on premiumization and brand strength, which has enabled it to better manage cost pressures from raw materials. This initiative is reflected in an improvement in sales realization, which rose by 2% quarter-on-quarter, mainly attributable to the product mix enhancement and a 1%-1.5% price hike initiated in July.
There is an anticipated 5%-6% increase in raw material costs for the second quarter, a factor the company is monitoring closely. The efforts to take additional price hikes will depend on raw material availability and the market’s capacity to absorb these increases.
As of the end of the quarter, net debt stands at INR 3,832 crores, a slight rise due to increased working capital borrowing. However, leverage ratios remain robust, with a net debt to equity ratio of 0.8 and a net debt to EBITDA ratio of 1.76, indicating a essentially stable financial health as the company focuses on debt reduction.
JK Tyre's international business, particularly JK Tornel Mexico, posted a decline in sales mainly impacted by local economic conditions, including lower working days due to holidays and elections. However, management expresses optimism for a recovery in sales performance as fiscal stability returns in the region.
The company’s consolidated capacity utilization crossed 80%, underpinning operational efficiency. Additionally, JK Tyre is expanding its market reach with strategic investments in the replacement market, exemplified by the addition of 44 brand shops and partnerships with fleet operators.
Going forward, JK Tyre maintains its guidance for revenue growth in the mid to high single digits for FY 2025, depending on the recovery of the commercial vehicle demand. Continued innovations in product offerings, especially in the electric vehicle sector, and enhanced digital marketing strategies will further support this growth trajectory.
In closing, JK Tyre appears poised for a resilient performance through FY 2025, driven by strategic pricing, premium product positioning, and a favorable macroeconomic environment. Investors might find the potential for healthy returns given the current focus on growth through efficiency improvements and market expansion initiatives.
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Ladies and gentlemen, good day, and welcome to Q1 FY '25 Results Conference Call of JK Tyre, hosted by ICICI Securities.
[Operator Instructions]
Please note that this conference is being recorded. And I now hand the conference over to Mr. [ Vasudev Banerjee ]. Thank you, and over to you, sir.
Thanks, Shlok. Thanks to the management of JK Tyre for giving us the opportunity to host the call. We have with us the senior management represented by Mr. Anshuman Singhania, Managing Director; Mr. Arun K. Bajoria, Director and President, International business; Mr. Anuj Kathuria, President, India Business; Mr. Sanjeev Aggarwal, Chief Financial Officer; and Mr. A.K. Kinra, Financial Adviser. So without wasting any time, I'd like to hand over the call to Mr. Anshuman Singhania for his initial comments. Over to you, sir.
Yes. Thank you. A very good afternoon to everyone. I welcome you again to join the JK Tyre Q1 FY '25 Earnings Call. I am Anshuman Singhania, Managing Director; and I have with me Mr. Arun Bajoria, Director, President, International; Mr. Anuj Kathuria, President, India; Mr. A.K. Kinra, Financial Adviser; and Mr. Sanjeev Aggarwal, CFO of the company. .
Let me start by sharing the highlights of Q1 of the financial year 2025. We recorded another quarter of profitable growth led by significant expansion in the operating margin on a year-on-year basis. Overall net profit surged INR 212 crores, a growth of 33% on a year-on-year basis.
Our strategic thrust on premiumization, brand salience and pricing has enabled us to manage raw material cost pressures. On the revenue front, overall revenue were flattish over the corresponding quarter, primarily due to lower OEM sales partially offset our export sales, while the replacement segment sales remained flat.
Net debt at quarter end stood at INR 3,832 crores. Fresh tax flows and return ratio remained healthy with improved leverage ratios. We are committed to continuously deleverage the balance sheet with better cash accruals and higher profitability.
Auto sales in volume terms in India continued to post decent growth in Q1. Commercial vehicle and passenger vehicle segment posted a low single-digit growth. M&HCV demand impacted due to slowdown in the infrastructure projects on account of general elections. Passenger vehicle sales also moderated during the quarter due to high base effect. However, order bookings remained strong in the overall SUV category.
The 2-, 3-wheeler segment witnessed a recovery largely due to improved demand in the sentiment in the rural area. We are optimistic about the tire industry, supported by reforms and a focus on infrastructure development. Moreover, the upcoming festive season and favorable monsoon condition augurs well for the industry. We are proud to share that the JK Tyre was awarded the Great Place to Work in the auto and auto component segment. This signifies our commitment in creating and sustaining a high trust and high performance culture.
During the quarter, we further expanded our market reach in the replacement segment by adding 44 brand shops, 40-plus fleet customers and 2 large accounts in the mobility business. With continuous evolution of the EV segment in India, the development of EV-oriented technology remains a key focus for the company.
Today, there are over 8,100 EV bus registered in India. And JK is the market leader with major fitment share. We are partnering with the leading players in the EV mobility sector, offering our comprehensive mobility solution. Moreover, JK Tyre's Mobility Solutions business achieved an ISO 9001-2015 certification from [ DNB ] which is the first of such tire quality certificate received by any company in the tire service industry.
In our continued effort to offer superior value proposition to our customers, we have introduced the next-generation tires for commercial vehicles to cater to the evolving needs of transportation sector and revolutionary JETWAY JUX-e for the electric buses. The recently expanded capacity of TBR and PCR tyre has enabled us to achieve higher levels of premiumization.
The ongoing capacity expansion program in the TBR and PCR and all steel light truck radial tires for an aggregate cost of INR 1,400 crores are progressing well. Our brand building efforts has been pivotal in enhancing the company's visibility and engagement strategy.
We created innovative digital campaigns that resonated with our target audience using compelling media content to boost visibility across the key demographics. Our recent campaign, Hindustan Mile Hindustan Se and Desh Ka Tyre ensuring effective effect impact on all media platforms.
Our focus on ESG and digitalization is driving us ahead towards excellence in this era of sustainable development. We remain committed to the strength of our -- in our processes to offer better experience to customers. At JK Tyre, we are committed to further reinforce our thrust of premiumization, digitalization, R&D innovation, sustainability and customer centricity and technology-driven manufacturing.
We have welcomed the move of the government, which has recently notified the continuation of the CVD on import of TBR tires from China. This is a very good move, and this move will go a long way in promoting the domestic manufacturing and sales of TBR.
Now I would respect Bajoria ji to talk about the performance of JK Tornel Mexico.
Thank you, MD, sir. JK Tornel Mexico registered the quarterly sales of MXN 1,234 million, equivalent to nearly INR 600 crores, a lower by about 13% on a year-on-year basis. EBITDA margins sustained at 8.7%, that is MXN 108 million equivalent to INR 52 crores. JK Tornel Mexico's financial performance for the quarter was slightly subdued due to general elections in Mexico, lower number of working days on account of the Easter holidays, in the first week of April and the peso appreciation impacting exports.
Overall economic situation in Mexico is expected to stabilize in the current calendar year and continues to be buoyant from the perspective of foreign direct investments and government expenditure plans. During the quarter, we have taken strategic price increase across categories in the major markets to offset the impact of rising raw material prices. Now I would request Aggarwal ji to brief about the financial performance of this quarter.
Thank you very much, sir. So let me briefly share the key highlights for quarter 1 of FY '24 -- '24-'25. The first is the consolidated revenues for the quarter were recorded at INR 3,655 crore, EBITDA margins during Q1 FY '25 were recorded at 14.1%, vis-a-vis 12.5% in the corresponding quarter, which is an expansion of 162 basis points. Profitability at EBITDA level were recorded at INR 516 crores as against INR 465 crores in Q1 last year, which is a growth of 11% on a Y-o-Y basis.
On a quarterly basis, cash profit stood at INR 403 crore as compared to INR 343 crores in Q1 last year, which is higher by 18%. Interest cost stood at INR 112 crores, which is lower by 8% over the corresponding quarter. Profit after tax stood at INR 212 crores, up by 33% on a Y-o-Y basis. Consolidated capacity utilization for the quarter was over 80%.
Consolidated exports stood at INR 637 crores, which is up by 9% on a Y-o-Y basis. Subsidiary companies, Cavendish Industries and JK Tornel Mexico continued to perform well and contributed significantly to the revenues and profitability on a consolidated basis.
Cavendish posted a top line of INR 975 crores with an EBITDA of INR 139 crores, registering an operating margin of 14.3%. Earnings per share on consolidated basis improved to INR 7.62 per share in Q1 as against INR 5.93 per share last year. Return ratios have significantly improved further. ROCE has posted -- ROCE at 15.4% and ROE at 20% are in the high-teens range.
Net debt stood at INR 3,832 crore as of June '24, higher by 3% over March numbers due to some working capital borrowing increase, and the leverage ratios sustained over March '24, net debt to equity and net debt to EBITDA remained at 0.8 and 1.76, respectively.
So the balance sheet of the company is much healthier and improved -- with improved financial ratios. We have already circulated earnings presentation, which is available on our website as well as on Stock Exchange website.
Now we open the forum for Q&A. Thank you.
[Operator Instructions]
The first question is from the line of Mumuksh Mandlesha from Anand Rathi.
Congratulations on the good margin performance. Sir, firstly, on the volume growth, sir, this quarter seems to be muted, sir. Can you explain what led to the volume to be low? And also, can you provide us some numbers around the growth side? How has been overall volume growth and across the various segments, OE and aftermarket and exports?
Okay. You see, in the CV segment, where we have the highest share and particularly, which impacted the volume was low, very low production of M&HCV production, which was a slowdown because of the infrastructure projects were generally impacted because of the general elections.
Also, there has been a temporary change in the overall CV segment mix, which has led to the OEM offtake during the quarter. So this was one of the volume growth where we are envisioning that in the second half of the year, it will pick up. In fact, in terms of our domestic volume, we remained flat in the replacement market. But in the export market, we had a significant jump of 19% over the corresponding quarter.
And sir, OEM would be, sir, how much fall, sir?
OEM was in the tune of about -- the fall was in the tune of about 5% to 6%.
So essentially, this is because of the OEM-led fall.
Got it, sir. And sir, just on the gross margin side, last time you mentioned about 4% increase in the RM basket cost. Can you just reiterate what was the impact this quarter? And also for Q2, how much further RM cost increase will be expected, sir?
So the average RM prices quarter-on-quarter basis, we have seen an impact of 3% to 4%. We are expecting the average raw material basket to increase in the range of about 5% to 6% in quarter 2.
Okay. And sir, on the price hike we have taken in July, sir, how much do you expect that price hike to cover the increase in the Q2 cost, sir?
So in -- for the quarter 1, we have taken -- our net sales realization has improved by 2% on a quarter-on-quarter basis. And that is led mainly by the price increase and better product mix.
Got it. And just on the price hike, sir, what's the plan to take further price hike to negate the impact, sir? And just on the rubber inflation, sir, what's your view on continuing increase in the natural India rubber prices, also the international prices also had inched up recently. So how do you see the stabilization there, sir?
So what we have seen -- what we have done for the current quarter right now, we have taken a price increase in the range of about 1% to 1.5%, and we further would like to assess the situation. Based on that, we will be able to take the price in the subsequent months for the quarter 2. And what was the second question, please?
On the natural rubber price increasing happening in the Indian rubber prices and also the recently international prices have inched up. So how do you see that stabilization, sir?
So you see what has happened is there have been a lot of supply chain disruptions in terms of vessel availability. So there has been a little bit of a delay in terms of the raw material incoming. So there, that has impacted on the pricing. Also, the monsoon season is also on.
So typically, in the monsoon season, any which way the availability is always a tight scenario. And therefore, the prices also go up. But we see that in the coming quarter, this shall stabilize.
Got it, sir. And sir, lastly, sir, on the -- what's your take on the competitor not taking price hike in the TBR segment and another peer announcing discounts in that segment. So what would be our approach to this situation? Also on the pricing front, how is the price difference on the TBR and PCR with the players like MRF and Apollo?
Anuj ji, would you like to take this please?
Yes. So regarding that, see, as we also mentioned and you heard Anshuman ji saying earlier that we are focused on our margin expansion. We're also working on product premiumization. So therefore, we saw that in quarter 1 also we were able to sustain our margins. Going forward, we want to do that.
The other thing is that I also strongly believe that in the last -- from September onwards, end of quarter 2 and also following up in quarter 3 and quarter 4, the demand in the M&HCV and the CV overall will be quite robust. So there will be demand coming up, and we are the market leader as far as the TBR is concerned. So we will be able to secure a decent top line growth as well.
And however, we are also working on a lot of our premiumization also in the TBR, wherein our power SKUs like the energy saver tires and the other extra mileage fires are also doing well. So based on that, we would like to have our own way forward and strategy wherein we would definitely like to increase the top line, but at the same time, not compromise on our margin as well.
So is it fair to say, sir, our prices remain stable, and we would keep on increasing the price hike to further compensate the RM cost inflation?
See, we'll have to watch this RM basket very carefully. As you know that it has been an upward trend, mainly led by the natural rubber. But we see that once the global supply chain challenges are resolved, availability improves and also our domestic production of natural rubber post the monsoon season should be improving.
So all that will play out in its own way. So we'll be watching this very carefully and depending on how the raw material basket pans out, we will take further calls on -- and also we are watching the market to see the ability of the market to absorb the increases that we are announcing.
The next question is from the line of Nirav Seksaria from Living Root Analytics, LLP.
Congratulations for a good set of numbers. Sir, could you quantify the EPR cost for this quarter?
EPR costs for the quarter. Sir, in fact, as we discussed last time also that we have started to pass on the EPR cost and have started charging as a direct line item. So -- but still because we did -- started that from the month of May onwards, so there is still some cost of about INR 20 crores which has been charged to the P&L. Going forward, this will also be passed through.
Okay. And sir, we are also expecting a 5% to 6% increase in raw material basket in Q2. So would we need an additional price hike to recover that pricing? And if yes, then what is the quantum of that?
As I explained earlier that in the month of July, we have already taken a price hike, and we will be subsequently assessing the situation and seeing the raw material hike. And based on that, we will take the price increase in the remaining 2 months of the second quarter.
Secondly, that our enriching of our product mix is also going to help us.
Sir, could you quantify the price hike taken in July?
1% to 1.5%, depending on which category we're talking about.
Okay. And so sir, did we stock up on to the raw material in this quarter in Q1?
Yes, we have. We actually started building a little bit from quarter 4 last year itself.
Okay. Hence, we can see that in Q1, the impact of raw material is relatively smaller?
Yes.
Is the same being done for Q2?
To a certain extent, yes. Again, different commodities in the raw material basket are differently availability as well as the stocking levels. But yes, overall, there is.
Sir, is it fair to assume that we are doing it for natural rubber in a hiking scenario?
Yes, we are working with our major suppliers, and we are strategically keeping our inventory levels that we did not have any impact of our production impact, but we are keeping that we are -- the teams are working very closely with our suppliers to make sure that there's no impact. And we don't see that in the coming quarters also, we don't envision any impact of our availability.
Okay, sure. And sir, could you give the split of capacity utilization in PCR and TBR?
See, overall capacity utilization for our radials is -- in radials it is around 90% plus and overall, it is 80 plus -- 80% plus.
The next question is from the line of Jyoti Singh from Arihant Capital Markets Limited.
Sir, if you can explain on the premiumization side that has increased, so that led to increase in the content for vehicle side. If you can shed some light on that? And second, on the CV segment side, how much market share we have?
You see, yes, we have been able to -- premiumization has been in the thrust. I can tell you that in the passenger power radial, 15 inch and above, we have a mix of -- the mix has gone up to almost around 50%. So there has been a significant growth in terms of our passenger car. And earlier, Anuj ji said that about -- in the truck radial also, we've been able to sell our more premium sizes. And the mix is almost around 92% to 95% of our premium sizes.
Okay. And sir, CV segment market share, how much we have?
See, CV segment overall is very difficult to say, but I can tell you that we are leaders in the domestic market in terms of TBR sales, both OE and replacement put together. We are also leaders in the light truck radial segment. And we are -- overall, if you see everything put together, even in the CV segment, we are having the leadership position. So this is what we can share with you right now.
And sir, just last question. On the replacement side, we are almost more than 62%. So what our view in future because a lot of demand -- demand is very high on the replacement side?
Yes. So replacement versus OE, it keeps on changing a little bit. But generally, what happens is that OE demand is stronger in the second half of the financial year. So in the quarter 3 and quarter 4, we expect that the demand for -- from the OE would be coming back to a better level. But it would not very significantly changed, but yes, it will be in that range.
But we are very optimistic, just to add, we are very optimistic on the outlook for the tire demand basically driven by the policy reforms, including the continued focus on infrastructure development. And more so when the monsoons are over and the government is already, as you know, trying to mobilize the infrastructure sector.
So there, with that, we are very optimistic that it will pick up. Moreover, the festive season is also in the favorable and as well as the monsoon condition also augers well for the industry. So overall, the demand is looking very optimistic.
Yes. And sir, just one more last question. On the 2-wheeler side, like we still on the consol basis, we are contributing 4% and 2-wheeler side demand is picking up. So are we targeting to increase further on the revenue mix side, we will be stable in this range?
See, yes, you're right, the 2-, 3-wheeler segment has picked up. And we are also part of the 2, 3-wheeler story. But our capacity is very small to compare to the large ones. We are also selling full in terms of our -- given the capacity, and we are continuously focusing all this 2-, 3-wheelers as well.
And just to add, even in the 2-, 3-wheeler segment, we are focusing on certain premium products. So having the limited capacity, we would like to kind of have more premium products. So we have launched the -- recently the new range of tires in the 2-, 3-wheeler segment also.
The next question is from the line of Mitul Shah from DAM Capital.
Sir, my first question is on Mexico operation for this Tornel. You highlighted that a double-digit decline is because of the various reasons, one of them is election and then holidays and all. But going forward, what is a steady state, whether this can be considered as a onetime effect in this quarter and situation will be much better or still there is an expected slowdown for next 1 or 2 quarters? That is the first part of the question.
You rightly said, going forward, things are going to be better and the new government is also going to be installed in the H2 beginning October. And therefore, overall, H1 plus H2, we hope to significantly improve our business as compared to H1.
Sir, on the same line, second question is, as we are entirely into the aftermarket in the Tornel operations and quite a sizable portion is also exported from, so how you see the situation? Or can you explain in a bit detail on the domestic market situation as well as those export geographies also for Tornel?
See, first of all, in the domestic market, I would like to inform you that in -- let us take first, the bias sector, the nylon tire sector. Our market share is nearly 100% because there is no other tire manufacturer in Mexico, who is manufacturing bias tires. So we are in a very commanding position, including supplies to the military in Mexico.
So that is one. Now if you come to the passenger car radials, we are commanding the highest market share in the Mexico market despite all the leading brands of the world, whether it is Michelin, whether it's Continental, whether it is Goodyear, Bridgestone, what have you.
So we are in a very, very strong position being the only Mexican manufacturer of tires in Mexico. And therefore, going forward, as I just mentioned, we should now come back to our better earning capacity, better sales and therefore, overall performance.
And export from Tornel?
Exports of Tornel are -- look, the thing is that we have jumped from 40% in financial year '21 to nearly 50% in financial year '24 due to enhanced focus on North America and the Latin American markets. However, I must mention to you that our exports did take a little bit of a beating because the dollar peso rates went down and the peso became so strong that from MXN 20 to a dollar, it came down to almost 17.5. So that was a temporary phase. Again, now the -- in the Q2, we are seeing that the peso has gone back to 18.5 and should stabilize around that 18.5 to 19. And therefore, the exports out of Mexico are again now reasonably profitable.
So sir, this currency thing is also impacting margins or no major impact of that?
No, certainly, the margins will be slightly better when you have a peso earning more from the exports, certainly.
Okay. And sir, second question on the domestic market side for replacement, particularly. As you highlighted earlier that there was a slowdown on the commercial vehicle side, particularly OEM. How has been the situation on the replacement side? And again, Q2, Q3; Q2 may be weak because of the monsoon going on for OEM side, but how you would see the replacement side for next 2, 3 quarters for M&HCVs?
So if you take the M&HCV, the replacement Q1 was quite okay. Generally, Q1 is okay. Q2 is a slow quarter because of the monsoon. But we expect that once the monsoon is over and the rate movement picks up. In fact, in terms of we monitor the BTK very closely in terms of rate availability and sales movement. So BTKM is showing a positive growth, and we expect that BTKM should be growing very close to the GDP growth rate of 6.5% to 7%.
So that augurs well for the M&HCV segment. So we should be able to see that replacement demand for M&HCV in quarter 3 and quarter 4 should be in that range of high single digits.
Sir, and lastly, on the balance sheet side, how is the debt position at the end of quarter? And any change in the CapEx for this year and next year? That's all, sir.
So on the debt side, the balance sheet, of course, there is some amount of the working capital loan we had to raise during the quarter, and that is why the total debt has gone up to about -- net debt, I'm saying has gone up to about INR 3,832 crore as against INR 3,704 crore in the last quarter. So that is the single change in the working capital side.
Going forward, we are expecting that with the increase in sales from this quarter onwards, expectedly, we should be able to manage this working capital better, and we will definitely reduce the overall debt. That is our focus.
On CapEx, sir?
So we have -- we are undertaking the PCR and TBR project earlier in the tune of INR 800 crores, which has been completed and the ongoing expansion is on with INR 1,400 crores project, which is on in the TBR and all-steel truck radial and passenger car radial.
The next question is from the line of Jaimin Desai from Emkay Global.
Am I audible?
Yes.
Congratulations on strong margin performance in the quarter. My first question was related to the outlook for the year. Last quarter, you had indicated about 8% to 10% consolidated revenue growth expected for this year. Does that still hold?
If you actually see the quarter 1, quarter 1 has been a little more sluggish in terms of the commercial vehicle demand for quarter 1 and quarter 2, we are hoping that the smart recovery would happen. So here, again, we'll have to watch quarter 2, but I think so still, we should be hopeful for somewhere between the middle to high single digit will still hold.
Okay. Mid- to high single digit, okay. And sir, on the PCR side, in last quarter, we were expecting about high single-digit growth for PCR replacement. Do we hold on to that guidance as well?
PCR replacement should be doing well because there is -- also, we understand that the replacement cycle is getting shortened. So in the replacement market, the demand should be good. Also, more of the SUVs, we saw that a couple of years that the SUVs were becoming the larger population of the overall sales.
So as of now, there has been kind of not a very robust scenario. But going forward, I think so things should get better.
Understood. And sir, this quarter, you've seen a good improvement in margin performance of both the subsidiaries, Cavendish and Tornel on Q-o-Q basis. Could you highlight some of the reasons for the same, particularly in Tornel because there we also had lower scale sequentially if margins have improved.
Well, if you -- if you take the -- see, we have an element of outsourced tires also in Tornel. So if you take your own manufactured, whether we do it in our own plants in Tornel Mexico, our margins are higher to the extent of about 10.1% in this quarter. But going forward, those margins are expected to improve because we have taken a price increase effective 1st of June 2024, and that will get settled down. And therefore, our margins are expected to be better in the second half as well as in the second quarter, second half.
That means from, let's say, August, September.
Just adding to Mr. Bajoria ji's answer. There, I would like to highlight that in both the subsidiaries from the corresponding quarter from the sequential from the sequential quarter, our PBIDT has increased. And even from the corresponding quarter, it has increased, the EBITDA margin.
Sir, what was the quantum?
Mr. Desai, we would request you to return to the question queue for your follow-up questions.
All right. All right.
[Operator Instructions]
The next question is from the line of [ Aditya Akhani ] from Omkara Capital Private Limited.
May we please move on to the next caller, if it is possible.
Shlok, can you please move on to the next one?
So we are awaiting for the participants to enter into the question queue. [Operator Instructions]
The next question is from the line of Shruti Mulchandani from Unifi Capital.
Am I audible?
Yes.
Yes, ma'am you're audible.
Sir, basically, I wanted to know what is the contribution of fleet management and mobility services to the consolidated revenue?
So if you look at the mobility and the fleet business, it's a business that is growing very well. It has been having a good growth rate. However, as of now, it contributes to around 3% to 4% of the overall top line. But it's a business that is growing at a much faster rate as compared to the other part of the business.
Okay. So if you could help me with the business model for the fleet management, do you like to charge the fleet operator on a per tire basis? Or how is it like if you could help me with that?
So as I explained, there are 2 parts to it. One is called the fleet management, where the fleet owner still continues to buy the tire upfront, but we also provide the comprehensive service. It's a one-stop service solution. We have got 350-plus touch points where you can avail of the services, which are required. And these services are available to most of them on a cashless basis. They enter into an arrangement with us, wherein we can give them this pan-India services. This is part of the fleet management.
On the other side, on the mobility solutions, that is where we sell the miles. This is on a pay-per-use basis. And this is where the customer gets the tires fitted on the vehicles, which we monitor, and he has to just pay based on the number of kilometers that the vehicle is driven, and we monitor these vehicles very closely.
But yes, there are certain other minimum charges and all that. But more or less, this is also coming up well. We have found acceptance with almost close to 50 marquee accounts as of now, managing close to a good number of the population of vehicles that are under mobility business is also improving steadily.
Okay. I understood. That was really helpful. Also, is this segment margin accretive or something like that, sir?
Margin accretive. It is margin accretive.
Okay. Understood. Understood. And also just a bookkeeping question. So the LTV segment, is it a part of the other segment or the TBR segment?
Could you repeat your question, please?
So the revenue coming from the sales of LCV tires. So is it a part when 0you're reporting the revenue, is it a part of the TBR segment or the other segments?
No, it is part of the others. It's not part of the TBR.
The next question is from the line of [ Aditya Akhani from Omkara Capital Private Limited ].
Sir, my question would be what is the revenue mix by market and product line for Indian operations for Q1?
For Q1 revenue. So market-wise, the replacement market is the -- from where the largest revenue comes, close to 60%. OEM sales market, actually, if replacement was 60%, our OEM is another 20 -- 24% to 25%, and the remaining is exports around 14% to 15%.
Okay. And by product line?
By product line, total truck line is around roughly 60%. And passenger line radial is another 25% and the others is around 15%.
The next question is from the line of Jaimin Desai from Emkay Capital.
The line for the participant is disconnected. [Operator Instructions]
There are more than 20 parties in the conference.
We would wait for a moment while question queue assembles.
So if there is no further questions, so we can finish this call.
Okay. If there are no further...
Thank you very much to all of you for joining the call. Hope we have been able to clarify all your questions. Thank you so much. Thank you.
On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.