Apollo Tyres guides high single-digit FY26 revenue growth

What the management is signalling for FY26

Apollo Tyres Ltd said it expects its top line growth to be at least in the high single digits in FY26 (Apr-Mar). The management shared the outlook during a conference call with analysts. It indicated it would still push for double-digit growth, but called high single digits a more realistic estimate at this stage. The key driver, according to the company, is the domestic replacement segment in India. The management also pointed to a post-monsoon improvement in infrastructure and mining activity as a near-term support for India operations, especially into Oct-Dec.

India growth levers: replacement remains the anchor

The company’s commentary kept the focus on replacement demand, where it expects momentum to continue. It also said exports are showing signs of picking up versus the previous quarter, though earlier commentary flagged challenging export markets as a drag on domestic growth. Separately, Apollo Tyres has previously indicated that pricing has been largely stable across categories, with some marginal price reductions in the truck bias segment due to competition. The company has also highlighted product availability as a factor in passenger car tyres, and said it is adding sizes through production in India. These operational details matter because the FY26 growth ambition depends not only on demand but also on how quickly capacity and product mix can respond.

Raw material costs: easing expected, but FX remains a swing factor

Apollo Tyres said it expects raw material prices to come down a little further in the September quarter, if the dollar-rupee exchange rate does not change materially. It also said raw material prices per tonne declined by around 4% compared with the March quarter. For Q2 (Jul-Sept), management expects raw material costs to be slightly lower versus current levels, while noting uncertainty due to exchange rates.

Natural rubber prices rose 3% quarter-on-quarter, according to the company, while synthetic rubber and nylon fabric saw a decrease in prices. It also said it could see benefits from falling crude oil derivative prices materialise in the September quarter. At the same time, Apollo Tyres flagged currency-related volatility as a key risk because of its dependence on spot rates.

Europe operations: flat revenue, weaker operating leverage

In Europe, Apollo Tyres reported quarterly revenue of EUR 146 million, which the company quantified as INR 14.89 billion. This was described as largely flat year-on-year. Management said the demand environment was challenging and industry volumes declined in key categories.

The company said it performed better than the overall market in the passenger car replacement segment, a critical category for its European business. However, it also stated that margins were impacted due to the revenue effect, negative market growth across product segments, and adverse operating leverage. Segment commentary pointed to passenger car and light truck volumes being slightly up, while special tyres volumes declined 40% as customers from high-cost plants did not renew contracts. The agricultural segment remained weak, and volume growth in the truck, bus and radial tyres segment was negative.

Cost pressures in Europe: raw materials and staff costs

Apollo Tyres said Europe raw material prices rose 3% year-on-year during the quarter, hurting margins in the region. It also noted that staff cost increments were impacted because top line growth in Europe was flat. The company reiterated its focus on profitable growth in the region through new product launches, premiumisation of product mix, and cost optimisation.

FY25 scorecard: revenue up, profitability down

For FY25, Apollo Tyres reported annual revenue of INR 261.23 billion, up 3% year-on-year. Over the same period, net profit fell 35% year-on-year. Operating profit declined to INR 35.71 billion for FY25 from INR 44.47 billion in the previous fiscal year.

For the March quarter (Q4 ended March 31), the company posted revenue of INR 64.24 billion, up 3% year-on-year. Quarterly net profit fell to INR 1.85 billion from INR 3.54 billion a year earlier. Chairman Onkar Kanwar said the company’s recent performance did not meet industry benchmarks and its own expectations, and that an internal review identified key challenges behind the underperformance, with targeted strategies being implemented.

June quarter outcomes: one-time costs and headline profit volatility

Apollo Tyres reported consolidated net profit of INR 0.129 billion in the June quarter, down 95% year-on-year, citing a one-time cost of INR 3.70 billion. Consolidated revenue from operations for the June quarter rose nearly 4% year-on-year to INR 65.61 billion.

Separately, a Reuters report said Apollo Tyres’ consolidated profit fell about 24% to INR 3.02 billion in the April-June period, missing analysts’ estimate of INR 3.86 billion (LSEG), while revenue rose 1.5% to INR 63.35 billion. The Reuters report also said rubber-related input costs rose 7%, pushing overall expenses up about 4%.

Key numbers at a glance

Market impact and what investors will track next

Apollo Tyres’ shares closed 0.5% lower at INR 434.20 on the NSE on Friday, after the management commentary and the latest set of numbers in circulation. For investors, the immediate watchpoints are the trajectory of replacement demand in India, the pace of post-monsoon infrastructure and mining activity, and whether raw material costs soften as the company expects in Q2.

Europe remains a swing factor. The company has called out weak industry volumes, a sharp decline in special tyres volumes, and margin pressure from operating leverage and higher raw material prices. How quickly premiumisation and cost optimisation translate into better profitability will be a key part of the story, especially alongside currency volatility risks.

Conclusion

Apollo Tyres’ FY26 outlook is built around high single-digit revenue growth, led by India’s domestic replacement market and a possible post-monsoon demand lift. The company is also watching raw material and currency trends closely, while Europe continues to face a challenging demand environment. The next set of quarterly updates will be important to assess whether cost relief in the September quarter and the expected India demand pickup show up clearly in reported performance.