Q1 2027 Apollo Tyres Ltd Earnings Call Transcript
Key Points
- Apollo Tyres Ltd (BOM:500877) delivered a strong consolidated top-line growth of 12.8% year-on-year, with India operations achieving their highest-ever revenue of Rs.54.6 billion, up 15.6% YOY.
- The company saw double-digit volume growth across all segments in India, including replacement (13%), OEM (10%), and exports (15%), positioning it ahead of the market in many segments.
- Despite significant raw material cost pressures, Apollo Tyres Ltd (BOM:500877) successfully defended margins through calibrated price increases and disciplined cost control, with July showing a strong start for Q2.
- The company is well-positioned to benefit from anti-dumping duties on Chinese tires in Europe, which is expected to boost its PCR replacement segment, already growing in double digits.
- Apollo Tyres Ltd (BOM:500877) maintains a strong balance sheet with a net debt-to-EBITDA ratio of 0.4, and continues to advance strategic initiatives in R&D, digitalization, and sustainability, including recognition as one of India's top 30 sustainable companies.
- Consolidated EBITDA margin declined by 150 basis points year-on-year to 11.7%, primarily due to raw material cost pressures, with raw material costs escalating sharply by nearly 17% in Q1.
- The Europe business experienced muted top-line growth of only 0.5% YOY, impacted by the Netherlands plant closure transition and revenue loss from agri tires and truck radial capacity shifts.
- Raw material inflation is expected to continue, with an anticipated 8% sequential increase in Q2, requiring further price hikes of 1-2% in July and August to cover the full cost impact.
- The geopolitical situation in West Asia continues to create headwinds in select international markets, leading to heightened uncertainty and cost volatility in raw materials, energy, and logistics.
- The company faces challenges in the high-end agri tire segment due to capacity constraints, relying on offtake partners for the medium term, which may impact margins and supply stability.
Good afternoon, everyone.
On behalf of Mutlar Roswell Securities, I welcome you all for the Q1 FY27 results conference call of Apollo Tires Limited.
From the management side, we have with us today Mr. Gaurav Kumar, Chief Financial Officer.
I would now like to hand over the call to Mr. Gaurav Kumar for his opening remarks post which we will begin the question-and-answer session.
Over to you, sir.
Aniket, thanks.
Good afternoon, ladies and gentlemen, and thank you for joining us today.
There's some glitch in my video, so I'll have to do through audio only.
I welcome you all to the Apollo Tyres post-results conference call.
Neeraj is not able to join this call because of an urgent commitment.
I am pleased to share an update on our performance for the quarter, along with our outlook.
But let me first begin with the announcement
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