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    Apollo Tyres

    APOLLOTYRE
    Automobile and Auto Components·14 Nov 2025
    Management Summary

    Apollo Tyres delivered a strong Q2 FY26 performance, driven by robust revenue growth in both India and Europe, coupled with improved profitability. The company highlighted strategic initiatives in R&D, branding, and sustainability, alongside progress in managing its capital structure and addressing competitive dynamics.

    Highlights

    7
    • Consolidated revenue grew 6% YoY to INR 68.3 billion, marking the highest revenue growth in the last 10 quarters.

    • Consolidated EBITDA margin stood at 14.9%, an improvement from 13.2% in Q1 FY26 and 13.6% in Q2 FY25.

    • India operations reported 6% YoY revenue growth to INR 47.1 billion with an EBITDA margin of 15.3%.

    • Europe operations achieved 4% YoY revenue growth to EUR 177 million, with an EBITDA margin of 12.7%.

    • Consolidated net debt to EBITDA improved to 0.8x, while India's net debt to EBITDA was 1.1x.

    • Enschede plant closure settlement cost estimated at EUR 17 million, with a projected payback period of approximately 2 years.

    • India volume growth was 4% overall, with double-digit export growth and mid-single-digit growth in Replacement and OEM segments.

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue₹6,830 Cr+6%YoY
    2. 02Consolidated EBITDA₹1,020 Cr
    3. 03Consolidated EBITDA Margin14.9%
    4. 04India Revenue₹4,710 Cr+6%YoY
    5. 05India EBITDA₹720 Cr

    Segment breakdown

    RevenueEBITDAEBITDA Margin
    India Operations₹4,710 Cr₹720 Cr15.3%
    Europe Operations₹177 Cr₹22 Cr12.7%
    Heatmap· 3 shared metrics

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Net ₹2,600 crores · 0.8x EBITDA

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Q3 Revenue Growth
    at least at the same level
    High
    Profitability
    Q3 Profitability
    remain at this level
    High
    Profitability
    Return on Capital Employed (ROCE)
    15%
    Medium
    Volume
    India Replacement Demand Growth
    mid-to-high single digits
    High
    Volume
    India Exports Growth
    high single digit
    High
    Volume
    Europe Market Growth
    low single digits
    Medium
    Raw Material Cost
    Raw Material Cost Trend
    stable to slightly down
    High
    Restructuring
    Enschede Plant Closure Payback Period
    about 2 years
    High

    Q3 Revenue Growth

    Next quarter (Q3 FY26 results)
    Current6% YoY (Q2 FY26)
    Targetat least at the same level or better

    Why it matters

    To assess if the company can sustain its top-line momentum following strong Q2 performance and strategic initiatives.

    We are hopeful that Q3 revenue growth should be, if not better, but at least at the same level.

    How to verify

    key_financials.metrics[label='Consolidated Revenue']

    Risks & concerns

    2
    RiskSeverity

    Increased competitive intensity from new entrants in India

    New financially strong players entering TBR and PCR segments could increase competition, but management plans to focus on product quality, brand, and distribution rather than price wars.Both acknowledged

    medium

    Challenging demand environment in Europe

    The European market continues to be challenging, although it has shown some improvement, with expectations of only low single-digit growth.Management acknowledged

    medium

    Q&A highlights

    8

    “So, our internal estimates, we do not have official data for that. On the TBR replacement, we estimate our market share to be around 29%. And on the PCR replacement side, based on our internal estimates, we would be at 20% market share, which would be industry-leading.”

    Provides specific market share estimates for key segments in India and clarifies the company's competitive position.

    asked by Aniket Mhatre

    3 min read7 chapters

    Detailed Narrative

    01

    Q2 FY26 Consolidated Performance Overview

    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.

    02

    India Operations Driving Domestic and Export Growth

    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.

    03

    Europe Operations Navigating Challenging Environment

    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.

    04

    Strategic Initiatives and Sustainability Focus

    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.

    05

    Capital Structure and Debt Management

    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.

    06

    Market Outlook and Competitive Dynamics

    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.

    07

    Enschede Plant Restructuring Progress

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.