Apollo Tyres Ltd Q4 FY26 Earnings Analysis

- Expect healthy momentum in demand to continue into Q4 and beyond FY'27. - India volumes for OEM and replacement grew in mid-teens with exports close to 20%. - Domestic replacement demand strong across all segments (PCR, TBR, truck, two-wheelers, farm). - European market expected to grow at a long-term trend of 1-2% despite recent negativity. - Capacity expansions underway (PCR in Hungary, PCR and TBR in India) to meet growing demand. - Current expansions projected to handle demand for a few years; no immediate further expansion plans unless market changes. - Capacity utilisation high (PCR ~82%, TBR ~89% in India), indicating near-term capacity constraints. - Anticipate mid-single digit annual price increases if raw materials stabilize. - Volume growth outlook for FY'27 remains very good with expectation of continuing demand momentum.

- Volume growth for standalone business is expected in mid-teens; Europe volumes remain flattish. - Demand outlook for FY'27 is positive with strong momentum continuing, particularly in India. - Pricing environment largely stable with raw material costs expected to remain steady in Q4; some mid-single digit price hikes yearly anticipated if raw materials stay stable. - Capacity expansions underway (India and Hungary) to support growth, with anticipation of hitting capacity constraints by end FY'27. - EBITDA margins improved QoQ; strong operational cash flows reducing net debt. - EBITDA margin guidance suggests maintaining or improving profitability through premiumization and cost controls. - Expects A&P spend to normalize at about 2.5% of sales to drive top-line growth. - One-time other income in the quarter elevated standalone profits, not recurring. - Overall, growth expected to be profitable with focus on free cash flow and return ratios.

- Approved INR 5,800 crores capex for Andhra Pradesh plant to expand PCR and TBR capacities over FY'27, FY'28, and FY'29. - Growth capex of about INR 2,000 crores planned for FY'27. - Overall consolidated capex for next year estimated at around INR 3,000 crores, including maintenance and ongoing PCR expansion in Hungary. - FY'27 and FY'28 will see high capex levels, with FY'28 potentially exceeding INR 3,000 crores; FY'29 capex expected to taper off. - Capacity expansions aim to add roughly 350 tonnes per day, with about INR 17 crore capex per tonne due to inflation and technology upgrades. - European PCR capacity expansion underway in Hungary, progressing as planned. - Netherlands plant closure planned end of June 2026; transition to Hungary and India plants expected to improve European operations profitability from second half of FY'27.

- The company plans to take on some debt to fund the capex in FY'27 and FY'28. - Despite this, they expect net debt to EBITDA to remain below their long-term target of 2.0x during the vision period, even at peak debt levels. - No specific mention of new equity fundraising was made. - The INR 3,000 crore capex for FY'27 and potentially higher in FY'28 will be partly funded through this additional debt. - The company prioritizes profitability, free cash flow generation, and return ratios in its funding strategy.

The transcript provided on page 17 and surrounding pages does not explicitly mention the current or expected order book or pending orders for Apollo Tyres. The discussion primarily revolves around market share, capacity utilization, market demand, capex plans, margin outlook, and other operational and financial performance aspects. Therefore: - No specific data on current or expected order book/pending orders was shared in this transcript. - The company indicated strong demand momentum across product categories. - Capacity utilization in India is high (high 80s percentage), with capacity expansions planned, implying strong order prospects. - Capex approvals indicate readiness to meet growing demand, but no explicit order book figures were mentioned. For detailed order book information, investors may need to refer to official quarterly or annual reports or direct disclosures by Apollo Tyres.