Apollo Tyres Limited has announced an ambitious expansion strategy with a planned capital expenditure of nearly ₹3,500 crore aimed at increasing manufacturing capacity across India and Europe. The investment comes at a time when the tyre industry is witnessing rising raw material prices, especially natural rubber, along with increasing volatility in global commodity and freight markets. Despite these challenges, the company is moving ahead with its long-term growth plans backed by improving financial performance and stable demand across key markets.
The majority of the proposed investment will be directed toward India, where Apollo Tyres plans to strengthen its production footprint to support rising domestic demand and maintain high utilisation levels at its manufacturing facilities. Out of the total planned expenditure, around ₹3,000 crore is expected to be allocated to Indian operations, while the remaining amount will be invested in its European business, including the Hungary manufacturing unit. The company aims to continue operating at nearly 90% capacity utilisation while improving operational efficiency across geographies.
Apollo Tyres reported a strong financial performance for the January–March 2026 quarter, which has provided additional support for the company’s expansion plans. Revenue during the quarter rose by over 14% year-on-year to ₹7,340 crore, while EBITDA increased by nearly 28% to ₹1,070 crore. EBITDA margins also improved to 14.6% compared to the previous year. For the full financial year FY26, the company posted revenue growth of 9%, reaching ₹28,470 crore, while EBITDA climbed to ₹4,140 crore. The company also reduced its net debt by around ₹900 crore during the year, improving its overall financial position and balance sheet strength.
At the same time, Apollo Tyres continues to face pressure from rising raw material costs. Natural rubber prices have increased significantly, moving from around ₹200 per kilogram to nearly ₹250 per kilogram. To partially offset these higher costs, the company has implemented price hikes across key markets. In India, tyre prices were increased by approximately 6% to 8%, while European markets witnessed price revisions of around 2%. However, management has indicated that further pricing actions may become necessary if input costs remain elevated.
The company is also restructuring parts of its European operations to improve profitability. Apollo Tyres recently announced the closure of its Enschede plant in the Netherlands as part of efforts to optimise its manufacturing footprint. The closure resulted in a non-cash write-off and restructuring-related cash payouts, but the company expects the move to support better operating margins in Europe over the long term.
Global geopolitical tensions, particularly in West Asia, continue to create uncertainty across energy, crude oil, commodity and freight markets. Despite these external pressures, Apollo Tyres remains focused on expanding manufacturing capacity, improving efficiency and strengthening its position in both domestic and international markets. The company’s latest investment plan reflects its continued emphasis on long-term growth, operational stability and capacity expansion amid a challenging global business environment.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.
