Apollo Tyres’ margins hold up, but competition is closing in

Apollo Tyres Ltd saw a higher-than-anticipated improvement in profitability in the September quarter (Q2FY26) on easing raw material costs.

- Harsha Jethmalani [e-mail]

Consolidated Ebitda margin expanded 90 basis points (bps) sequentially, led by 170 bps rise in gross margin to 14.9%. It exceeded the consensus estimate of 14%.

Raw material cost fell 3% sequentially in Q2. Natural rubber is trading at ₹210 per kg, synthetic rubber at ₹175 per kg, and carbon black at ₹115 per kg, the company said. The company expects these costs to remain stable or even move slightly lower in Q3FY26. Benign raw material cost, an improving mix towards replacement and exports and closure of Enschede plant in the Netherlands by June 2026 should unlock structural cost benefits, aiding profitability.