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Competitive intensity limiting price hikes
View Risks →Apollo Tyres Limited — Q3 FY25
Apollo Tyres reported Q3 FY25 consolidated revenue of ₹6,930 crore, up 5% YoY, with EBITDA margin of 13.7% (flat QoQ) despite raw material cost pressures.
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Apollo Tyres reported Q3 FY25 consolidated revenue of ₹6,930 crore, up 5% YoY, with EBITDA margin of 13.7% (flat QoQ) despite raw material cost pressures. India revenue was ₹4,540 crore (+5% YoY) with EBITDA margin of 11.1%, impacted by a 10% decline in OEM volumes. Europe revenue was EUR 181 million (+3% YoY) with EBITDA margin of 17.7%, driven by replacement growth and mix improvement (UUHP segment at 48% of PCR replacement volumes). Management expects demand recovery in Q4, particularly in replacement segments, and raw material costs to plateau. Risks include competitive intensity limiting price hikes and export weakness due to freight cost fluctuations. The company plans increased capex next year to address PCR capacity constraints.
अपोलो टायर्स ने Q3 FY25 में ₹6,930 करोड़ का राजस्व कमाया, जो पिछले साल से 5% ज़्यादा है। कच्चे माल की लागत बढ़ने के बावजूद, कंपनी का मुनाफा (EBITDA मार्जिन) 13.7% रहा, जो पिछली तिमाही के बराबर है। भारत में राजस्व ₹4,540 करोड़ (+5%) और मुनाफा 11.1% रहा, क्योंकि वाहन निर्माताओं (OEM) को बिक्री 10% गिर गई। यूरोप में राजस्व 181 मिलियन यूरो (+3%) और मुनाफा 17.7% रहा, जो रिप्लेसमेंट बिक्री और बेहतर मिश्रण (खासकर UUHP टायरों की 48% हिस्सेदारी) से हुआ। कंपनी को Q4 में मांग बढ़ने की उम्मीद है, खासकर रिप्लेसमेंट में। कच्चे माल की लागत स्थिर रहने का अनुमान है। जोखिमों में प्रतिस्पर्धा के कारण कीमतें न बढ़ पाना और माल ढुलाई लागत में उतार-चढ़ाव से निर्यात कमज़ोर होना शामिल है। कंपनी अगले साल PCR क्षमता बढ़ाने के लिए ज़्यादा निवेश (कैपेक्स) करेगी।
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India Replacement Volume Growth
5%
+5% YoY
India replacement volumes grew 5% YoY in Q3, driven by TBR and PCR segments.
India OEM Volume Growth
-10%
-10% YoY
India OEM volumes declined 10% YoY, partially offsetting replacement growth.
Europe UUHP Mix
48%
+5pp YoY
UUHP segment accounted for 48% of Europe PCR replacement volumes, up from 43%.
Reifen.com Revenue
EUR 88M
N/A
Reifen.com contributed EUR 88 million in revenue with 7% EBITDA margin.
What Changed vs Last Quarter
NEW
Q4 replacement demand momentum to continue
Management expects healthy replacement demand momentum in Q4, with signs of further pickup beyond current levels.
NEW
Raw material costs flattish in Q4 vs Q3
RM costs expected to be range-bound in Q4, around similar levels as Q3, indicating plateauing.
NEW
No price hikes planned in near term
Given market situation, no price increase is planned in the near term; will continue to assess.
NEW
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.
DROPPED
RM cost expected to increase ~1% in Q3, decline from Q4
Raw material costs to rise slightly in Q3 and start coming down from Q4 onwards.
DROPPED
India replacement volume double-digit growth for full year
Management expects double-digit growth in TBR and PCR replacement segments for FY25.
DROPPED
CapEx guidance maintained at ₹1,000 crore for FY25
No change in CapEx guidance; ₹300 crore spent in H1.
NEW RISK
Competitive intensity limiting price hikes
Management cited competitive intensity as reason for not planning price hikes despite margin pressure.
NEW RISK
Export weakness due to freight cost fluctuations
Exports were flattish due to weak demand in certain markets and high logistics costs, with peers outperforming.
NEW RISK
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.
RISK GONE
Sticky other costs may pressure margins
Other expenses (freight, EPR, advertising) remained elevated; management expects them to persist near current run rate.
RISK GONE
Competitive pricing pressure and market share dynamics
Analyst noted margin gap with peers narrowing; management acknowledged focus on profitability may limit volume growth.
RISK GONE
OEM demand weakness may persist
OEM segment declined double digits; management sees no near-term recovery.
Fast read
Guidance and risk preview
Management expects healthy replacement demand momentum in Q4, with signs of further pickup beyond current levels.
Management cited competitive intensity as reason for not planning price hikes despite margin pressure.
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