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%.

• Despite headwinds, market share gains were achieved in domestic passenger car, commercial vehicle, and agri replacement segments, though OEM segment declined.

• Europe showed signs of recovery, with improved product mix and strong growth in the ultra-high performance (UHP) segment.

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

• PAT for Q2 FY25 was ₹2,974 million, down from ₹4,742 million in Q2 FY24, with PAT margin at 4.6%.

Financial highlights

• Consolidated revenue for Q2 FY25 was ₹64,370 million, up 2.5% year-over-year; H1 FY25 revenue was ₹127,719 million, up 2.0% year-over-year.

• Consolidated EBITDA for Q2 FY25 was ₹8,779 million, with a margin of 13.6%, down from 18.5% in Q2 FY24.

• India operations revenue was ₹44,617 million, with EBITDA at ₹5,400 million and margin at 12.1%.

• Europe operations revenue was €171 million, up slightly year-over-year and 17% sequentially; EBITDA margin improved to 14.8%.

• Reifen.com reported €45 million in revenue, with double-digit growth year-over-year and break-even margins.

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.