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.
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Apollo Tyres · forward-looking guidance across the available source record.
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margins
India replacement volume double-digit growth for full year
Management expects double-digit growth in TBR and PCR replacement segments for FY25.
CapEx guidance maintained at ₹1,000 crore for FY25
No change in CapEx guidance; ₹300 crore spent in H1.
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.
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.
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.
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.
Q4 replacement demand momentum to continue
Management expects healthy replacement demand momentum in Q4, with signs of further pickup beyond current levels.
Raw material costs flattish in Q4 vs Q3
RM costs expected to be range-bound in Q4, around similar levels as Q3, indicating plateauing.
No price hikes planned in near term
Given market situation, no price increase is planned in the near term; will continue to assess.
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.
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.
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.
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.
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.
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.
CapEx of INR 35 billion for FY27
Nearly 80% allocated to India for capacity expansion in truck and car tires.
European margins to improve from H2 FY27
Post Enschede closure, cost competitiveness expected to lift margins above current levels.
Further price increases needed beyond 6-8%
Management indicated at least two more rounds of price hikes required to fully offset raw material inflation.