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![ManuJemini Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1898307811639226368.png) Manu Jemini [@ManuJemini](/creator/twitter/ManuJemini) on x XXX followers
Created: 2025-07-19 11:30:01 UTC

Apollo Tyres: Acknowledges Underperformance, Charts a Course for Recovery! 🇮🇳🇪🇺

A deep dive into their Q4 FY25 & FY25 Concall ⬇️

In a candid earnings call, Apollo Tyres' management acknowledged that FY25 performance was below expectations, with margins compressing and growth lagging peers in both India and Europe.

The company is now focused on a strategic turnaround, including a major restructuring in Europe and a renewed push in India.

X. Outlook & FY26 Focus
- Turnaround Expectations: Management expects a "much, much better performance" starting from Q1 FY26, with improving trends already visible in May. The focus is on a "recovery in operating performance helped by a better top-line momentum."
- Margin Expansion in Europe: Following the planned closure of the Netherlands plant, management expects European margins to "definitely expand." The cost of conversion in the Hungary plant is almost one-third of that in the Netherlands.
- Regaining Lost Ground: Key priorities for India are to regain lost market share in the OE (Original Equipment) and export segments.
- Capex: The capex for FY26 is guided at a reduced ₹1,500 Crores, split equally between growth and maintenance. This includes capacity expansions in Hungary and Andhra Pradesh. 🎯

X. European Business Restructuring
- Enschede Plant Closure: The company has announced its intention to close its production facility in Enschede, Netherlands, in 2026. This plant contributed less than XX% of European volumes.
- Shifting Production: Volumes from the Netherlands plant will be absorbed by the expanding Hungary plant and by exports from India, leading to significant cost advantages. An impairment charge of EUR XX million was taken in Q4 related to this.
- Capacity Expansion: The Hungary plant is undergoing an expansion that will add XXXXX PCR (Passenger Car Radial) tyres per day by the end of FY26. 🏭

X. Performance in India
- Mixed Results: In Q4, the replacement market showed robust growth, especially in the Truck & Bus Radial (TBR) segment. However, the OE segment declined due to a conscious withdrawal from low-margin businesses, and exports also underperformed.
- Volumes & Revenue: Overall volumes in India were flattish YoY in Q4. Revenue for the quarter stood at ₹45.8 billion, up XXX% YoY.
- Market Share: Management admitted to some market share loss in the PCR replacement and OE segments but stated that the TBR replacement share is holding steady. 🇮🇳

X. Q4 FY25 Financials & Headwinds
- Margin Compression: The consolidated EBITDA margin for Q4 FY25 compressed to XX% from XXXX% in Q4 FY24.
- Key Drags: The underperformance was attributed to three main factors:
X.  Steep raw material cost pressures.
X.  Lower operating leverage due to slower revenue growth.
X.  A global organizational restructuring in mid-2024, which took 6-8 months to stabilize.
- Consolidated Numbers: Q4 consolidated topline grew by X% YoY. 📉

X. Strategic & Operational Updates
- Premiumization: The push towards premium products continues. In Europe, the premium mix in PCR tyres is now in the "mid-40s." In India, a new flagship campaign targeting SUV owners was launched in April 2025.
- New OE Wins: The company has secured "additional model wins from prominent German PV manufacturers," which will support future growth.
- Working Capital: Working capital has increased to XX% of sales due to supply chain volatility and the need to hold higher inventory. 🛠️

X. Management Tone
- Candid & Self-Aware: The management's tone was notably frank, directly addressing the company's underperformance.
- Confident on Turnaround: Despite the challenges, they expressed conviction in their ability to drive a recovery in FY26, backed by the strategic restructuring, cost optimization efforts, and new capacity additions. 👍


XX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1946532976306565544/c:line.svg)

**Related Topics**
[india](/topic/india)
[quarterly earnings](/topic/quarterly-earnings)
[deep dive](/topic/deep-dive)

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