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New entrant competition in India
View Risks →Apollo Tyres Limited — Q2 FY26
Apollo Tyres reported a solid Q2 FY26 with consolidated revenue of INR 68.3 billion (+6% YoY) and EBITDA margin of 14.9% (+130 bps YoY), driven by strong India performance and recovery in exports.
bullish
high
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Apollo Tyres reported a solid Q2 FY26 with consolidated revenue of INR 68.3 billion (+6% YoY) and EBITDA margin of 14.9% (+130 bps YoY), driven by strong India performance and recovery in exports. India revenue grew 6% to INR 47.1 billion with EBITDA margin of 15.3%, aided by GST rationalization benefits and volume growth in replacement and OEM segments. Europe revenue grew 4% YoY to EUR 177 million, though demand remains challenging. Management expects healthy demand momentum in H2, with October showing strong growth. Raw material costs are expected to remain range-bound. Risks include competitive intensity from new entrants and uncertain European demand recovery.
अपोलो टायर्स ने वित्त वर्ष 2026 की दूसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कुल कमाई 68.3 अरब रुपये रही, जो पिछले साल से 6% ज्यादा है। कमाई पर मुनाफा (EBITDA मार्जिन) 14.9% रहा, जो पिछले साल से 1.3% बेहतर है। यह भारत में मजबूत बिक्री और निर्यात में सुधार के कारण हुआ। भारत में कमाई 6% बढ़कर 47.1 अरब रुपये हुई, जिसमें मुनाफा 15.3% रहा। इसका कारण जीएसटी में छूट और टायर बदलने व नई गाड़ियों की बिक्री बढ़ना है। यूरोप में कमाई 4% बढ़ी, लेकिन मांग कमजोर है। कंपनी को अक्टूबर में अच्छी बिक्री देखने को मिली और आगे भी मांग बनी रहने की उम्मीद है। कच्चे माल की कीमतें स्थिर रहने का अनुमान है। जोखिमों में नई कंपनियों से प्रतिस्पर्धा और यूरोप में अनिश्चित मांग शामिल है।
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Read Transcript →Quarter Snapshot
India Volume Growth
4%
+4% YoY
Overall volume growth in India for Q2 FY26, driven by farm and two/three-wheeler segments.
Europe UHP Mix
49%
+3pp YoY
Ultra-high performance tire mix in Europe increased to 49% from 46% last year, supporting premiumization.
India TBR Market Share
29%
flat
Estimated market share in India TBR replacement segment, with share loss arrested.
India PCR Market Share
20%
flat
Estimated industry-leading market share in India PCR replacement segment.
What Changed vs Last Quarter
NEW
H2 revenue growth to sustain or improve
Management expects Q3 revenue growth to be at least at Q2 levels, driven by GST benefits and brand investments.
NEW
EBITDA margin to sustain or improve in H2
Profitability expected to remain at current levels or improve, supported by stable raw material costs and operating leverage.
NEW
India replacement demand to grow mid-to-high single digits
Replacement demand expected to improve from current low levels to mid-to-high single digit growth.
NEW
Enschede closure by end June 2026
Production closure at Enschede plant expected by end June 2026, with payback period of about two years on EUR 55 million cash costs.
DROPPED
Q4 replacement demand momentum to continue
Management expects healthy replacement demand momentum in Q4, with signs of further pickup beyond current levels.
DROPPED
Raw material costs flattish in Q4 vs Q3
RM costs expected to be range-bound in Q4, around similar levels as Q3, indicating plateauing.
DROPPED
No price hikes planned in near term
Given market situation, no price increase is planned in the near term; will continue to assess.
DROPPED
Capex to increase next year for PCR capacity
Next year's capex will increase above maintenance level (~₹700-750 cr) by about ₹800 cr for PCR capacity expansion in India and Europe.
NEW RISK
New entrant competition in India
A financially strong new player is entering PCR and TBR segments, potentially increasing competitive intensity and pricing pressure.
NEW RISK
European demand recovery uncertainty
European market remains challenging with low single-digit growth expected; recovery is not yet assured.
NEW RISK
Raw material cost volatility
While raw materials are currently stable, any upturn could pressure margins, especially given competitive pricing dynamics.
NEW RISK
OEM share loss in PCR
Apollo lost ground in PCR OEM shares due to not bidding for certain unprofitable businesses, which may impact future volumes.
RISK GONE
Competitive intensity limiting price hikes
Management cited competitive intensity as reason for not planning price hikes despite margin pressure.
RISK GONE
Export weakness due to freight cost fluctuations
Exports were flattish due to weak demand in certain markets and high logistics costs, with peers outperforming.
RISK GONE
Gross margin pressure from high-cost inventory
India gross margin contracted ~300bps QoQ partly due to consumption of high-cost inventory; normalization expected but uncertain.
Fast read
Guidance and risk preview
Management expects Q3 revenue growth to be at least at Q2 levels, driven by GST benefits and brand investments.
A financially strong new player is entering PCR and TBR segments, potentially increasing competitive intensity and pricing pressure.
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