Apollo Tyres to Invest ₹1,500 Crore in Expansion and Maintenance in FY26

Published:

February 11, 2025

Author:

James Lockwood

Apollo Tyres has announced a ₹1,500 crore investment for the financial year 2025-26 (FY26). The funds will be split into:

₹700 crore for maintenance and technology upgrades
₹800 crore for expanding its passenger car radial (PCR) tyre capacity through a brownfield expansion

This follows its ₹350 crore standalone capex and ₹500 crore consolidated capex in the first nine months of FY25. Currently, Apollo Tyres’ operations are running at 79% capacity, with PCR and Truck & Bus Radial (TBR) tyres at over 80%.

Tyre Industry Trends

Replacement tyre demand is rising and expected to stay strong in Q4 FY25
Commercial vehicle (CV) sales could improve due to government infrastructure projects
Exports to the US and Middle East are likely to support growth

In Q3 FY25, Apollo Tyres saw mixed results:

Overall sales grew slightly
Replacement market grew by 5%
OEM sales dropped by 10%
Exports remained flat

Rising Costs Affecting the Industry

Raw material prices have increased, putting pressure on profits:

Natural rubber: ₹215/kg
Synthetic rubber: ₹195/kg
Carbon black: ₹125/kg
Overall raw material costs: Up 15% YoY and 2% QoQ to ₹175/kg

Apollo Tyres expects raw material prices to stabilise in Q4 FY25, which could help improve profits.

What’s Next?

Apollo Tyres is focusing on growth while managing costs. Expanding its PCR tyre production will help meet growing demand, while strong replacement sales and stabilising material costs could support profitability in the coming months.

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Key Takeaways

How much is Apollo Tyres investing in FY26?
₹1,500 crore – ₹700 crore for maintenance, ₹800 crore for expansion.

What is Apollo Tyres expanding?
Its passenger car radial (PCR) tyre production through a brownfield expansion.

How is the tyre market performing?

Replacement tyre demand is strong
OEM sales are down
Exports are flat

What challenges is Apollo Tyres facing?

Rising raw material costs (up 15% YoY)
Slower OEM demand

What’s the outlook for the coming months?

Strong replacement market expected
Potential export growth
Raw material prices may stabilise

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