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Informist, Saturday, Feb. 8, 2025

By Akshay V. Johnson

MUMBAI – Apollo Tyres Ltd. expects some moderation in its capital expenditure guidance of INR 10 billion for 2024-25 (Apr-Mar), but the same to increase significantly next year, partially due to its plans to add capacity for its passenger car radial tyres business, the management said in a post-earnings analyst conference call Friday. For the next financial year, the company is looking at a total capital expenditure of around INR 15 billion-15.50 billion. Some moderation in capex is expected for this financial year as the company has spent only 5 billion so far in FY25.

The company expects its operating performance to improve going forward due to a recovery in demand from India and Europe, along with the benefit of lower raw material prices. Initiatives are being taken by the company to increase profitability. The growth in its Indian operations is expected to be driven by the replacement segment, in which the company is already seeing better demand in January. The company said its commercial vehicle segment is improving, especially the truck, bus, and radial branch.

The company expects raw material prices to be range bound in the March quarter, around similar levels as in the December quarter. For the December quarter, the raw material prices were around INR 175 per kilogram, up 15% on year. For the period, the natural rubber price was around INR 215 per kg, the synthetic rubber price was around INR 195 per kg, and the black carbon price was around INR 125 per kg, the management said.

The company reported a consolidated net profit of INR 3.37 billion for the December quarter, down 32% on year. However, the company's consolidated revenue was up 5% on year at INR 69.28 billion. The company's consolidated earnings before interest, tax, depreciation, and amortisation fell 22% on year to INR 9.47 billion, with EBITDA margin declining by 465 basis points to 13.7%. The decline in EBITDA margin was largely on account of increased raw material costs, the management said.

The company detailed its December quarter earnings Thursday post market hours. On Friday, shares of the company closed at INR 426.15 on the National Stock Exchange, up 2.3% from the previous close.  End

Edited by Deepshikha Bhardwaj

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