Apollo Tyres

“Over the medium term, we remain committed to building a European business capable of delivering high teen operating margins.”

“Of course, we will see volume upsides as well. Our expectation is it should be between mid to high single digits as compared to last year.”

“Now, ROCEs, of course, will, as we go through the CapEx cycle, there may be a short-term impact on ROCE, but again, at a stable state, we will, as we have guided in the past, we always want to target a mid-teem ROCE, which will be our stable state of operations.”

“So, I think it's very important to keep that demand momentum in consideration as we look at our expansion, CapEx expansion, because otherwise, if we don't take timely action, we will end up losing market share.”

“Now, alongside what was also happening was we also relocated our TBR manufacturing facility from Hungary to AP, our India plant. Plant operations in Enschede stopped end of first quarter.”

“we had shut down our Enschede plant and that was basically to ensure that we kind of move away from a high cost manufacturing location.”

“India operations revenue increased by nearly 26% year-on-year to INR 59.2 billion, representing an acceleration over the growth delivered in the first quarter.”

“Our PCR business continued to gain market share despite subdued demand conditions, reinforcing the strength of a brand and product proposition.”

“So, we, in OEM we witnessed around about 25% plus growth in volume followed by Replacement which was in low double digits and exports wherein it was largely flattish.”

“Moving into Replacement, I think the pack was there led by V-Strom, while the numbers are fairly small but the volume growth was maximum seen in terms of percentage in the two-wheeler segment which was again above around 25%, 26%”

“PCR in fact gave us about mid-teens and Truck was high single digits.”

“Looking ahead, we expect demand conditions in India to remain supportive.”

“So, Europe impact is I think a combination of two, both factors as you rightly pointed out. There is market has slowed down.”

“as of now we are being very careful and conservative on the exports because we see a strong demand momentum in the domestic market.”

“India EBITDA stood at INR 6.6 billion with a margin of 11.1% compared to 15.3% in the corresponding period last year.”

“Since April 2026, raw material costs have increased by approximately 25%, making this one of the steepest and fastest cost inflation episodes we have experienced in many years.”

“In response, Apollo has implemented pricing actions of up to 15% in the Replacement segment alongside meaningful price increases in the OEM business.”

“our objective is to ensure that the enhanced pricing discipline demonstrated during this cycle becomes a permanent feature of the business.”

“On margins, although the direction of recovery is clear, the price timing actually will depend on the trajectory of commodity markets and geopolitical developments.”

“As on 30th September 2026, consolidated net debt to EBITDA stood at just 0.9 times, providing substantial capacity to fund future growth while maintaining a prudent capital structure.”

“Even under our ongoing investment plans, we are fairly confident that leverages will stay comfortably within our targeted range.”

“So, you know, so first half I think a large impact was also due to the payouts related to the plant shutdown. Now that is behind us, so as you rightly indicated the second half should see stable working capital norms”

“So, it's a combination of both, you know, and we will, we may see more debt coming in as we embark on our expansion plans that we have announced.”

“Our net debt to EBITDA at a consol is below one with this additional debt as well. And even with all the expansion plans that we have announced, we are confident that we will remain in a workable limit on net debt to EBITDA.”

“On the innovation front, we further strengthened our product portfolio through new approvals and engagements with leading OEMs including BMW, Mercedes-Benz, Mahindra and Tata Motors.”

“Before I begin, let me say that I'm honored to take the role of Chief Financial Officer at Apollo Tyres.”

“In this quarter itself if you would have seen there is around EUR 2.3 million exceptional item in the European operations which was largely as a fallout of some bit of employees that were remaining in a different legal entity and that also now has been taken into the books.”

“So those kind of costs may keep coming in trickle but we don't expect them to be a significant amount.”

“To conclude, while geopolitical developments and commodity volatility continue to create uncertainty in the near term, the underlying fundamentals of a business have continued to strengthen.”

“On a consolidated basis, our revenue grew over 16% year-on-year to Rs. INR 79.7 billion, while EBITDA stood at INR 8.6 billion, translating into an EBITDA margin of 10.7%.”

“During the quarter, we successfully completed the SAP S/4HANA implementation for our US business and now we are on our way to implement the same for the European and the Indian operations.”

“And coupled with our whole S4/HANA implementation in Europe, all that is expected to get over in this financial year or maybe by quarter one of next financial year.”

“More importantly, this was our strongest year- on-year revenue growth in the last 16 quarters, reflecting the strength of our brands, customer relationships and market positioning.”