Apollo Tyres has unveiled a major capital investment plan worth around ₹3,500 crore aimed at expanding its manufacturing capabilities across India and Europe. The move comes at a time when the company is navigating elevated raw material costs, fluctuating global commodity prices, and ongoing restructuring efforts in its European operations.
The expansion strategy reflects the company’s intent to strengthen its production base while maintaining high utilisation levels of nearly 90%. A significant portion of the planned investment—close to ₹3,000 crore—will be directed towards its India operations, while the remaining funds will be deployed in Europe to support capacity upgrades and operational efficiency improvements.
Strong Financial Performance Supports Expansion
Apollo Tyres has reported a healthy financial performance, which has provided a strong foundation for its upcoming investment cycle. In the January–March quarter, the company recorded revenues of approximately ₹7,340 crore, marking a growth of over 14% compared to the same period last year.
Profitability also improved during the quarter, with EBITDA rising by nearly 28% to ₹1,070 crore. Margins expanded to 14.6%, reflecting better operational efficiency and improved pricing realisation. For the full financial year FY26, the company posted revenues of about ₹28,470 crore, representing a year-on-year increase of 9%. EBITDA for the year climbed to ₹4,140 crore, registering double-digit growth.
At the same time, Apollo Tyres strengthened its balance sheet by reducing net debt by around ₹900 crore, bringing it down to approximately ₹1,600 crore. This reduction has improved financial flexibility, enabling the company to fund its expansion plans more comfortably.
Strategic Restructuring in Europe
As part of its global optimisation strategy, Apollo Tyres has taken steps to restructure its European footprint. A key development includes the closure of its Enschede facility in the Netherlands. This restructuring has resulted in a one-time non-cash write-off of €43 million, along with a cash payout of approximately €50 million.
The company expects this rationalisation to enhance long-term profitability in Europe. Management has indicated that EBITDA margins in the region could stabilise at levels above 16% once operations normalise after restructuring.
Input Cost Pressures and Pricing Adjustments
The tyre industry continues to face pressure from rising raw material costs, particularly natural rubber. Prices have increased significantly over recent months, moving from around ₹200 per kilogram to nearly ₹250 per kilogram. This sharp rise has added to production costs and impacted overall margins.
To manage this situation, the company has implemented price increases across key markets, including a 6–8% hike in India and around 2% in Europe. However, ongoing volatility in commodity markets may require further adjustments depending on future cost trends.
Global geopolitical uncertainties, especially in West Asia, have also contributed to fluctuations in crude oil, freight, and other input costs. Despite these external challenges, Apollo Tyres continues to focus on maintaining stable operations and supporting demand growth in both domestic and international markets.
Summary
Apollo Tyres has announced a ₹3,500 crore expansion programme aimed at strengthening its manufacturing capacity in India and Europe. The investment is supported by improved financial performance, steady revenue growth, and a stronger balance sheet following debt reduction efforts. While the company faces challenges from rising raw material prices and global economic uncertainties, it is actively restructuring its European operations to improve efficiency and profitability. The expansion plan is expected to enhance production capabilities and support long-term business growth across key markets.
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