Apollo Tyres

Apollo Tyres delivered a robust Q2 FY26, achieving consolidated top-line growth of 6% year-on-year, with revenue reaching INR 68.3 billion. This performance marks the highest revenue growth in the last 10 quarters on both a standalone and consolidated basis. The consolidated EBITDA margin improved to 14.9%, up from 13.2% in the previous quarter and 13.6% in the same quarter last year, reflecting strong operational execution.

The India business was a key growth driver, reporting a revenue of INR 47.1 billion, a 6% increase year-on-year, and an EBITDA margin of 15.3%. Volume growth in India stood at 4% overall, with mid-single-digit growth observed in both the Replacement and OEM segments. Notably, export markets showed a strong recovery with double-digit growth, contributing significantly to the overall performance. The premium Vredestein brand also achieved its highest-ever volumes in Q2 FY26 in India.

European operations recorded a revenue of EUR 177 million, representing a 4% year-on-year growth and a 21% sequential increase, despite a persistently challenging demand environment. The EBITDA margin for Europe improved to 12.7% from 10.8% in the last quarter. The company's premiumization strategy continues to yield results, with the Ultra High Performance (UHP) mix increasing to 49% from 46% in the same quarter last year.

Apollo Tyres is actively pursuing strategic initiatives, including securing additional model wins from German OEM manufacturers through R&D efforts. The company has also made a landmark move by becoming the lead title and jersey sponsor of the Indian cricket team, aiming to enhance brand awareness. In sustainability, Apollo Tyres improved its S&P Global ESG rating score to 58 in 2025 (up from 53 in 2024) and launched a digital healthcare application for truck drivers as part of its healthcare initiatives.

The company maintained a healthy capital structure, with consolidated net debt at INR 26 billion as of September 25, similar to March 2025. This resulted in a consolidated net debt to EBITDA ratio of 0.8x. For India operations, net debt stood at INR 27 billion, with a net debt to EBITDA ratio of 1.1x, a slight improvement from 1.2x at the beginning of the year. The FY26 Capex guidance remains unchanged, with PCR capacity expansions in Hungary and Andhra Pradesh on track.

Management anticipates sustained top-line growth momentum in both India and Europe, with profitable growth remaining a core focus. India is expected to see healthy demand in H2, supported by the new GST regime and recovery in infrastructure and mining segments. While acknowledging increased competitive intensity from new entrants, the company plans to counter this by focusing on brand, product quality, and distribution network expansion rather than price competition. Raw material costs are expected to be stable to slightly down in Q3.

Apollo Tyres has reached a settlement with the Works Council in the Netherlands regarding the closure of the Enschede plant. The estimated additional cost for this restructuring is EUR 17 million, with a projected payback period of approximately 2 years. The full implementation of the closure is expected by end-June 2026, which is anticipated to have a positive impact on the profitability of European operations in the long term.