Apollo Tyres (APOLLOTYRE) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 was challenging due to seasonal weakness in India and a steep increase in raw material costs, leading to a sequential decline in operating margin to 13.6%.

• Consolidated revenue for Q2 FY25 reached ₹64,370 million, up 2.5% year-over-year, with EBITDA at ₹8,779 million, down 24.3% year-over-year due to raw material inflation.

• India operations saw single-digit YoY growth in replacement volumes and double-digit growth in exports, but OEM segment remained soft.

• Europe operations achieved 0.8% YoY revenue growth and improved EBITDA margin by 74 bps, with a strong UHP mix at 46%.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, and authorized raising up to ₹10,000 million via NCDs, subject to shareholder approval.

Financial highlights

• Consolidated revenue for Q2 FY25 was INR 64.4 billion, up 3% year-over-year; H1 FY25 revenue was ₹127,719 million, up from ₹125,241 million YoY.

• Consolidated EBITDA stood at INR 8.8 billion, with a margin of 13.6%, down from 14.4% in the previous quarter and 18.5% YoY.

• Consolidated net profit for Q2 FY25 was ₹2,974.55 million, compared to ₹4,742.51 million in Q2 FY24; H1 FY25 net profit was ₹5,994.57 million, down from ₹8,711.59 million YoY.

• Standalone Q2 FY25 revenue was ₹44,617.40 million, with net profit at ₹1,647.77 million; EBITDA margin fell to 12.1% from 19.1% YoY.

• European operations revenue was €171 million, up slightly YoY and 17% sequentially; EBITDA margin improved to 14.8%.

Outlook and guidance

• RM costs are expected to rise slightly in Q3 and decline from Q4 onwards.

• Replacement demand in India is expected to improve in H2, while OEM demand remains muted.

• Double-digit growth anticipated in TBR and PCR replacement segments for the full year.

• European market recovery is expected to continue, with further margin improvement targeted.

• Board approved fund-raising via NCDs up to ₹10,000 million to support future growth and capital needs.