Risks
4 risks
Risk Intelligence
Raw material cost inflation
View Risks →Apollo Tyres Limited — Q4 FY26
Apollo Tyres reported a strong Q4 FY26 with consolidated revenue of INR 7,340 crore, up 14% YoY, and EBITDA margin of 14.6% (+160bps YoY).
neutral
medium
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
Apollo Tyres reported a strong Q4 FY26 with consolidated revenue of INR 7,340 crore, up 14% YoY, and EBITDA margin of 14.6% (+160bps YoY). India operations drove growth with high-teens volume expansion in replacement and OE, while Europe remained muted due to sluggish demand and cost inflation. The company announced price hikes of 6-8% in India to offset mid-to-high teens raw material cost inflation, with further increases likely. The Enschede plant closure is on track, expected to improve European margins from H2 FY27. A strong balance sheet (net debt/EBITDA at 0.4x) provides cushion. Key risk: sustained raw material inflation could pressure margins if demand softens.
अपोलो टायर्स ने वित्त वर्ष 2026 की चौथी तिमाही में मजबूत प्रदर्शन किया। कंपनी की कुल आय 7,340 करोड़ रुपये रही, जो पिछले साल से 14% अधिक है। कमाई का मार्जिन 14.6% रहा, जो पिछले साल से 1.6% बेहतर है। भारत में टायरों की बिक्री (नई गाड़ियों और बदलने के लिए) काफी बढ़ी, लेकिन यूरोप में मांग कमजोर रही। कच्चे माल की लागत बढ़ने से कंपनी ने भारत में कीमतें 6-8% बढ़ा दी हैं, और आगे भी बढ़ सकती हैं। यूरोप में एन्शेड फैक्ट्री बंद करने की योजना सही चल रही है, जिससे अगले साल से यूरोप में मुनाफा बेहतर होगा। कंपनी पर कर्ज बहुत कम है (कर्ज/कमाई अनुपात 0.4 गुना)। मुख्य जोखिम: अगर कच्चे माल की लागत बढ़ती रही और मांग कमजोर हुई, तो मुनाफा कम हो सकता है।
Risks4 trackedTranscriptfull text
Research workspace
Focused Modules
Transcript
Full text
Call Transcript
Full transcript text is available on this route.
Read Transcript →Quarter Snapshot
India Replacement Volume Growth (TBR)
20%+
+20%+ YoY
Truck bus radial replacement volumes grew over 20% YoY in Q4.
Capacity Utilization
90%
flat
Consolidated capacity utilization was 90% across India and Europe.
Net Debt to EBITDA
0.4x
-0.3x YoY
Improved from 0.7x in March 2025 to 0.4x in March 2026.
A&P Spend as % of Sales
4%
+2pp YoY
Higher due to cricket jersey sponsorship; expected to normalize to ~2.5%.
What Changed vs Last Quarter
NEW
Price increases of 6-8% in India in Q1 FY27
Two rounds of price hikes implemented, with 3-5% already effective and remainder in May.
NEW
CapEx of INR 35 billion for FY27
Nearly 80% allocated to India for capacity expansion in truck and car tires.
NEW
European margins to improve from H2 FY27
Post Enschede closure, cost competitiveness expected to lift margins above current levels.
NEW
Further price increases needed beyond 6-8%
Management indicated at least two more rounds of price hikes required to fully offset raw material inflation.
DROPPED
CapEx of ₹5,800 crore for Andhra Pradesh expansion over FY27-29
Board approved ₹5,800 crore CapEx for expanding PCR and TBR capacities in Andhra Pradesh, spread over FY27-29, with growth CapEx of ~₹2,000 crore in FY27.
DROPPED
Consolidated CapEx of ~₹3,000 crore in FY27
Overall consolidated CapEx for FY27 is expected to be around ₹3,000 crore, including Hungary expansion and maintenance.
DROPPED
A&P spend to normalize to 2.5% of sales
A&P spend as a percentage of sales will increase to about 2.5% in a normalized scenario, up from ~2% historically, to drive top-line growth.
DROPPED
Enschede plant closure by end June 2026
The Netherlands plant will stop production by end of June 2026, with benefits expected to flow from H2 FY27.
NEW RISK
Demand slowdown from price hikes and macro headwinds
Analyst raised concern that repeated price increases and diesel price hikes could impact fleet operator profitability and demand.
NEW RISK
Europe margin recovery delayed
Despite Enschede closure, sluggish market conditions and high energy costs may delay margin improvement beyond H2 FY27.
NEW RISK
Competitive pricing pressure in Europe
Management noted Europe is a price follower; if competitors delay hikes, Apollo may struggle to pass on costs.
RISK GONE
Europe demand remains weak
Europe market growth was -4% in Q3, and recovery is uncertain; continued weakness could delay margin improvement.
RISK GONE
High CapEx may pressure ROCE
The large CapEx cycle could temporarily depress ROCE, which is currently 13.5%, below the 15% target.
RISK GONE
A&P spend spike may persist
Elevated A&P spend due to BCCI sponsorship may take time to normalize, impacting near-term margins.
🤫 Topics management stopped discussing
Mentioned in Q2 FY25, Q3 FY26
Overall consolidated CapEx for FY27 is expected to be around ₹3,000 crore, including Hungary expansion and maintenance.
Mentioned in Q2 FY26, Q3 FY26
The Netherlands plant will stop production by end of June 2026, with benefits expected to flow from H2 FY27.
Fast read
Guidance and risk preview
Two rounds of price hikes implemented, with 3-5% already effective and remainder in May.
Mid-to-high teens sequential increase in Q1 FY27, with potential for further rise in Q2.
View Risks →