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Informist, Wednesday, Aug. 5, 2026

 

By Upasika Singhal

 

MUMBAI – Healthy demand from the replacement segment and from original equipment manufacturers, price hikes, and the depreciation of the rupee against the euro will drive Apollo Tyre Ltd.'s revenue growth in the June quarter, according to brokerages tracking the company. However, higher raw material, freight, and manufacturing costs are expected to drag down the net profit, brokerages said.

 

Apollo Tyres' consolidated net profit for the June quarter is projected to decline over 37% on year to INR 2.40 billion, according to the average of estimates from 11 brokerages. The highest estimate for Apollo Tyres' net profit for the June quarter is INR 3.15 billion from Motilal Oswal Financial Services Ltd. and the lowest is INR 1.84 billion from JM Financial Institutional Securities Pvt. Ltd.

 

The company's revenues are expected to grow 15% on year to INR 75.5 billion for the June quarter, according to the estimates. The highest estimate for revenue in the quarter is INR 77.9 billion from ICICI Securities Ltd. and the lowest is INR 73.8 billion from Nirmal Bang Equities Pvt Ltd.

 

The company's India business is expected to be the key growth driver and report double-digit growth in the June quarter, according to analysts. This growth will be driven by healthy demand across the replacement and original equipment manufacturer segments, supported by growth in commercial vehicle, passenger vehicle, and two-wheeler production, brokerages said. The European business is expected to remain broadly flat, brokerages said. Revenue growth is also expected to be supported by the depreciation of the rupee against the euro and price hikes undertaken to partially pass on higher raw material costs.

 

Apollo Tyres' earnings before interest, tax, depreciation, and amortisation are expected to decline around 10% to INR 7.84 billion in the June quarter from INR 8.68 billion in the year-ago quarter, according to the average of nine estimates. The highest EBITDA estimate is INR 9.11 billion by ICICI Securities and the lowest is INR 6.92 billion from Nuvama Wealth Management Ltd.

 

The EBITDA margin is expected to be weighed down by higher natural rubber, crude oil, freight and manufacturing costs, despite cumulative price hikes of around 8-9% undertaken by the industry over the past few months, brokerages said. Apollo Tyres has taken price hikes of around 9?tween March and June against a 15-20% increase in raw material costs, Motilal Oswal Financial Services Ltd. said. Brokerages expect the company's margin to contract by 150-410 basis points on year mainly due to the sharp rise in raw material costs. HFDC Securities expects the margin to decline to 11.5% while JM Financials projects a steeper contraction to 9.2%. Apollo Tyres had a 13.2?ITDA margin in the year-ago quarter.

 

The company's raw material costs are expected to remain elevated due to the war in West Asia and higher commodity prices, but are expected to ease in the second half of the financial year, brokerages said. The recent correction in crude oil prices and moderation in rubber prices are expected to support sequential margin recovery from the September quarter onwards, if sustained. However, a prolonged rise in crude oil prices could adversely affect commercial vehicle demand by increasing fleet operating costs and delaying replacement cycles, JM Financial said.

 

Apollo Tyres makes tyres for passenger and commercial vehicles, two-wheelers, light trucks, buses, and agricultural vehicles. The company will release its June quarter earnings Thursday. Investors will watch out for demand from the replacement segment and from the European market and the outlook on raw material costs in the coming days. 

 

Brokerages expect tyre companies with higher domestic exposure will post a weaker quarter due to elevated raw material costs. However, revenues are expected to increase across the sector due to healthy original equipment production, robust replacement demand, and price hikes.

 

Wednesday, the company's shares ended at INR 444.90, up 1.49% from closing price Tuesday. The shares have risen 11% since it announced its earnings for the March quarter.

 

Of the 12 research reports on the company available with Informist, eight have a "buy" recommendation on the stock, with an average target price of INR 477, which is 7% higher than closing price Wednesday. Two brokerages have a "hold" call on the stock with an average target price of INR 451 and two have a "sell" call on the stock with an average target price of INR 436.

 

Following are the June quarter earnings estimates for Apollo Tyres Ltd. from 11 brokerages, in descending order of the estimate of net profit, in INR billion:

 

Broking Firm	Net Sales	Net Profit	EBITDA
Motilal Oswal Financial Services Ltd	75.47	3.15	8.78
HDFC Securities Ltd	74.20	3.06
ICICI Securities Ltd	77.95	2.95	9.11
Nirmal Bang Equities Pvt Ltd	73.81	2.69	8.30
Nomura Equity Research	76.71	2.55	8.03
Anand Rathi Share and Stock Brokers Ltd	73.94	2.41
Kotak Securities Ltd	76.01	2.02	7.34
Elara Securities (India) Pvt Ltd	76.84	1.97	7.23
Emkay Global Financial Services Ltd	74.50	1.94	7.89
Nuvama Wealth Management Ltd	74.61	1.86	6.93
JM Financial Institutional Securities Pvt Ltd	76.31	1.84	6.99
Average	75.49	2.40	7.84

 

End

 

Edited by Pankaj Aher

 

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