Apollo Tyres Ltd., one of India’s leading tyre manufacturers, reported a mixed set of earnings for Q4 FY25, with revenue showing modest growth but profits sharply under pressure. The company’s performance reflects headwinds in input costs, pricing pressures, and macroeconomic challenges in its key markets.
Revenue Growth Steady but Profitability Erodes
For the quarter ended March 2025, Apollo Tyres reported a revenue of Rs 6,258 crore, marking a 2.6% year-on-year (YoY) increase. This signals that demand conditions — particularly in the replacement and export markets — remained steady. However, the company’s operating profitability took a significant hit.
The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) fell 18.5% YoY, coming in at Rs 813 crore, down from Rs 998 crore in the same period last year. The EBITDA margin slipped by 339 basis points to 13.0%, highlighting pressure on cost management and pricing power.
Most alarming was the steep fall in bottom-line performance — Net Profit (PAT) declined by 48.0% YoY, coming in at Rs 211 crore compared to Rs 406 crore in Q4 FY24. This has raised concerns about rising costs, inefficiencies, and possibly adverse forex movements or higher interest burdens impacting net income.
What’s Behind the Margin Compression?
The company did not provide full commentary as of reporting time, but several factors likely contributed to the margin decline:
Raw material costs, especially rubber and crude derivatives, have shown volatility over the past two quarters.
Weak European operations, where Apollo has a strong presence via its Vredestein brand, could have dragged consolidated performance. European demand has been tepid, especially in the passenger vehicle replacement segment.
Competitive pricing pressures in the Indian OEM (Original Equipment Manufacturer) market may have led to lower realizations despite steady volumes.
A higher base effect, as Q4 FY24 was one of Apollo’s best-performing quarters in recent years, may also have amplified the percentage declines.
FY25 Outlook and Market Response
Despite the Q4 weakness, the full-year FY25 picture may still hold up relatively well given earlier quarters showed stronger margins. Apollo Tyres continues to be a key beneficiary of India’s infra push and commercial vehicle recovery, both of which fuel demand for truck and bus radial tyres — one of the company’s strongest segments.
However, investor sentiment is expected to remain cautious in the near term. Analysts will watch for management commentary on raw material cost trends, price hikes, and volume guidance for FY26.
The stock may see short-term volatility, especially as the PAT decline was sharper than market estimates. Long-term investors will focus on whether the company can regain its 14–15% EBITDA margin zone and grow net profit meaningfully amid competitive pressures.
Conclusion
Apollo Tyres’ Q4 FY25 results serve as a reminder that topline growth is not enough — margins and bottom-line performance are just as critical. As the company navigates global cost fluctuations and market competition, its ability to maintain profitability while growing volumes will be key to long-term investor confidence. The upcoming management call and FY26 roadmap will now be closely watched for clarity.