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Informist, Monday, Nov. 10, 2025

By Gopika Balasubramanium

MUMBAI –  Apollo Tyres Ltd.'s bottom line for the September quarter is seen rising by more than 20% even though demand for tyres was weak during the quarter. A fall in natural rubber prices likely cushioned the company's profitability but the depreciation of the rupee may have offset these gains, according to brokerages. The company's top line, however, is projected to rise only in mid-single digit on weak demand, as customers delayed purchases in anticipation of lower goods and services tax rates.

The tyre maker's consolidated net profit for the quarter is expected to rise a little over 21% on year but decline over 4% sequentially to INR 3.67 billion, according to the average of estimates from nine brokerages. If the company's net profit rises for the September quarter as expected, it will mark the first increase after six consecutive quarters of decline on a year-on-year basis. The estimate of INR 4.55 billion by Emkay Global Financial Services Ltd. is the highest for the company's net profit and that of INR 3.36 billion by Anand Rathi Share and Stock Brokers Ltd. is the lowest.

The company will declare its earnings Thursday. The Gurgaon-headquartered company's consolidated revenue from operations is seen growing around 5% on year and 3% on quarter to INR 67.53 billion, according to the consensus estimate. The highest estimate for the company's net sales is of around INR 70 billion by Motilal Oswal Financial Services Ltd. and the lowest estimate of INR 65.59 billion is by JM Financial Institutional Securities Pvt. Ltd.

ICICI Securities sees the company's revenue from India business growing in mid-single digit on year. While demand was healthy in July, it turned weak in August, Motilal Oswal said. Customers deferred purchases in anticipation of the cut in rates in the goods and services tax, which hit the company's replacement segment, the brokerage said. The government cut GST rates on new pneumatic tyres to 18% from the earlier 28% and also on tractor tyres to 5% from 18%. Although Prime Minister Narendra Modi announced the planned GST rate reduction on Aug. 15, the lower rates were implemented on Sept. 22. In anticipation of the cut, many customers across industries delayed their purchases, hitting the September quarter volumes, revenue, and profit of many companies.

The demand environment in Europe was weak, two brokerages said. ICICI Securities expects revenue from Europe to decline by mid-single digit on year in euro terms due to subdued underlying demand, but to rise 10% sequentially on seasonality. Brokerage Motilal Oswal expects margins of the Europe business to improve 70 basis points on quarter but fall 330 bps on year to 11.5%. For the June quarter, Europe accounted for 27% of company's consolidated revenue from operations.

The company's earnings before interest, tax, depreciation, and amortisation for the September quarter is seen at INR 9.39 billion, up 7% on year and over 8% on quarter, according to the average of estimates from seven brokerages. The forecasts for EBITDA range from INR 8.84 billion to INR 9.58 billion. The tyre-maker's EBIT margin is seen declining to 4.3% from 5.9% in the year-ago quarter, Kotak Securities said. The on-year decline in EBIT margin is due to lower operating leverage and pricing pressures, the broking firm said.

In the September quarter, Apollo Tyres announced that it had been named the lead sponsor of the Indian cricket team for a three-year period. Analysts tracking the company are expected to watch for further details on the expenses related to this sponsorship, alongside the company's outlook on replacement demand and input costs.

At 1450 IST, shares of Apollo Tyres were 1.1% higher at INR 521.30 on the National Stock Exchange. The stock rose 19% since the company released its June quarter earnings on Aug. 7. The tyre-maker had reported a consolidated net profit of INR 128.78 million for the June quarter on consolidated revenue of INR 65.61 billion.

Of the 15 brokerage reports on Apollo Tyres available with Informist, 10 have a 'buy' or equivalent rating on the stock, with an average target price of INR 539, which indicates an upside of 4% from the current price. Of the remaining broking firms, one has a 'neutral' rating, and the other four have a 'sell' rating on the stock, with an average target price of INR 417.

Following are the September quarter earnings estimates for Apollo Tyres from nine brokerages in descending order of the estimate of net profit in INR million:

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Subhojit Sarkar

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