1. At a Glance – The Tyre That Refused to Go Flat
Apollo Tyres is currently trading around ₹508, flexing a market cap of ₹32,289 Cr, and behaving like that middle-aged uncle who suddenly joins CrossFit and starts posting transformation pics.
Q3 FY26 numbers were spicy: quarterly revenue of ₹7,743 Cr (up 11.8% YoY) and PAT of ₹488 Cr, a stunning 43.4% YoY jump. For a cyclical, rubber-and-oil-dependent business, that’s not small talk — that’s shouting across the wedding hall.
Valuation-wise, Apollo sits at a P/E of ~22x, below the industry average of ~30x, with EV/EBITDA at 8.9x. ROCE at 11.4% and ROE at 8.6% won’t win bodybuilding contests, but they’re improving. Debt is ₹4,518 Cr, manageable with interest coverage of 6.1x. Dividend yield stands at a respectable ~1%, because Apollo believes in sharing dessert, not just showing it.
Three-month returns are flat, six-month returns are up 18%, and one-year returns sit at ~22%. Translation: market is cautiously optimistic but not drunk yet.
So the question is simple: Is this a temporary rubber bounce or a structurally stronger tyre story finally unfolding?
2. Introduction – From Cyclical Pain to Margin Gain
Tyre companies are born dramatic. Raw material prices go up, margins cry. Demand slows, inventories sulk. Demand booms, capex explodes. Apollo Tyres has lived through all of this since 1972, and if balance sheets could talk, Apollo’s would sound like a retired army colonel: tired, disciplined, but still standing straight.
Over the last decade, Apollo’s topline has grown steadily (FY15–FY25 sales CAGR ~10%), but profits were erratic — thanks to European exposure, capex cycles, and the cruel gods of crude oil and natural rubber.
Then something interesting happened post-COVID: pricing discipline improved, Europe stopped bleeding as much, and India demand held firm.
Q3 FY26 is important not because it’s one good quarter — but because it caps a clear trend of margin normalization. Operating margin for the quarter was ~15%, versus low-teens not too long ago. PAT margins expanded sharply, helped by operating
leverage and relatively stable input costs.
And just when analysts were getting comfortable, Apollo dropped a ₹5,810 Cr capacity expansion plan in Andhra Pradesh, targeted by FY29. That’s not maintenance capex. That’s ambition.
But ambition in tyres can be dangerous. So let’s slow down and actually understand what Apollo does before we clap too loudly.
3. Business Model – WTF Do They Even Do?
Apollo Tyres does one thing, in many ways: it makes tyres — but for almost everything that moves and some things that barely do.
Core Segments
- Truck & Bus Radial (TBR) – Apollo’s crown jewel in India
- Truck & Bus Bias
- Passenger Car Radial (PCR)
- Light Commercial Vehicles
- Farm & Off-Highway Tyres
In FY24, Apollo commanded ~28–29% market share in trucks & buses and ~20% in passenger car radials. That’s not niche dominance — that’s mass-market muscle.
OEM vs Replacement
- OEM business: lower margins, higher volumes, ego boost
- Replacement market: higher margins, brand power, real money
Apollo has a strong replacement presence, especially in commercial vehicles, which cushions it during OEM slowdowns. That’s crucial because OEM demand behaves like Indian monsoons — emotional and unpredictable.
Geography
- India: Stable, margin-accretive, volume-driven
- Europe (Vredestein brand): Premium positioning but historically margin-volatile
Europe has been Apollo’s soap opera — high costs, closures (Netherlands plant planned to shut by summer 2026), impairments, and management headaches. India, meanwhile, has been the
