Informist, Friday, Aug. 8, 2025

By Gopika Balasubramanium

MUMBAI – Apollo Tyres Ltd. expects its top line growth to be in high single digits for 2025-26 (Apr-Mar) at least, which will be driven by the domestic replacement segment, the company's management said in a conference call with analysts Friday. For Oct-Dec, the company expects a pick-up in infrastructure and mining activity post-monsoon to support growth in its India operations.

"... top line growth, while we would still be pushing for a double digit, but maybe a high single digit would be a more realistic estimate," Apollo Tyres said.

They also expect raw material prices to "come a little further down" during the September quarter if there is no change in dollar-rupee exchange rates. The company said raw material prices per tonne declined around 4% from the March quarter. "Moving on the raw material outlook, we expect the raw material cost to be slightly lower in Q2 (Jul-Sept) vis-a-vis the current levels, however with a bit of uncertainty given on the exchange rates that is currently prevailing," the company said.

Coming to the tyre-maker's operations in Europe, revenue for the quarter was 146 million euros (INR 14.89 billion), largely flat from the same quarter a year ago. "...the demand environment was challenging which led to a decline in the industry volumes in key categories," it said. "We are keeping a close watch on the market and will continue to focus on profitable growth through new product launches, premiumisation of our product mix, and cost optimisation," Apollo Tyres said.

In Europe, the company said it performed better than the overall market in the critical segment of passenger car replacement tyres. The earnings before interest, tax, depreciation, and amortisation, or EBITDA, in Europe was 16 million euros (INR 1.63 billion) with an EBITDA margin of 10.8% compared to 13.7% in the same quarter a year ago.

"The margins were impacted due to the impact on revenue, a negative market growth across product segments, and this had an adverse operating leverage impact," it said. In Europe, passenger car and light truck volumes were slightly up, but the special tyres segment volumes declined 40% as customers from high-cost plants did not renew contracts. The agricultural segment remained weak and volume growth in the truck, bus and radial tyres segment was negative, the company said.

In Europe, raw material prices rose 3% on year during the quarter and this ate into the margins in the region. This also impacted staff cost increments, as top line growth was flat, the company said. Going forward, Apollo Tyres said it will likely see benefits due to a fall in prices of crude oil derivatives to materialise in the September quarter.

However, currency-related volatility remains a key risk for the company due to dependency on spot rates, it said. Natural rubber prices rose 3% quarter but synthetic rubber and nylon fabric saw a decrease in prices, the company said.

The company reported a consolidated net profit of INR 128.78 million in the June quarter, down 95% on year, due to a one-time cost of INR 3.70 billion. Its consolidated revenue from operations for the June quarter grew nearly 4% on year to INR 65.61 billion. On Friday, shares of Apollo Tyres closed 0.5% lower at INR 434.20 on the National Stock Exchange. The company announced its results on Thursday after market hours. End

Edited by Tanima Banerjee

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