Apollo Tyres Eyes Recovery In Europe Ops As Hungary Plant Expansion Kicks In

Apollo Tyres Ltd. expects its European operations, which struggled in 2024-25 due to capacity constraints at its Hungary facility, to bounce back this year as the company expands the plant, it said in an investor presentation following its March quarter earnings on Thursday. Europe contributes nearly 29% to the Gurugram-based tyre maker’s consolidated revenue.

Consolidated revenue from operations in the March quarter rose 2.6% on year to ₹64.24 billion. Of this, revenue from Europe stood at ₹18.91 billion.

Apollo Tyres is expanding capacity at its Gyöngyöshalász plant in Hungary to ease the strain on its passenger car radial tyre line, which is currently operating at over 90% capacity in Europe.

Sales in Europe slipped to €176 million in the March quarter from €182 million a year ago. The region’s EBITDA margin dropped to 14.3% from 19.1% due to higher raw material costs. The company is banking on a better sales mix and tighter cost control to lift margins in the coming quarters.

Raw material costs across the business rose 21.3% on year to ₹32.27 billion during the March quarter.

In India, Apollo Tyres reported sales of ₹45.81 billion in the March quarter, up from ₹43.87 billion a year earlier, aided by growth in the replacement segment. However, the India EBITDA margin narrowed to 11.2% from 15.6%, hit by a double-digit drop in exports and flat demand for original equipment tyres.

To protect profitability, Apollo scaled back capex in 2024-25 to ₹6 billion, down from ₹7 billion the previous year.