Apollo Tyres Ltd (APOLLOTYRE) Q1 FY27 Results Analysis: Margin Compresses 150 bps, Revenue Grows 12.8%

Apollo Tyres Ltd's Q1 FY27 numbers came in mixed, with revenue of Rs. 7,397.79 Cr (+12.76% YoY) and PAT growth of +2609.05% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Apollo Tyres reported strong 12.8% YoY revenue growth, driven by robust India demand with APMEA revenue up 14.5%. However, severe raw material cost inflation compressed EBITDA margin by 150 bps YoY to 11.73%, and Europe segment EBIT margin fell sharply to 0.74%. The company's balance sheet remains strong with debt/equity at 0.16x, but the CFO resignation adds uncertainty.

Key Investment Insights

Key Positives

• Revenue grew 12.76% YoY to Rs.7,397.79 Cr, highest Q1 revenue on record.
• APMEA segment revenue grew 14.50% YoY, driven by strong India demand.
• Normalized PAT (excluding exceptional items) grew 141.6% YoY to Rs.331.32 Cr.
• Debt/equity ratio remained at 0.16x, net worth grew 4.24% QoQ to Rs.17,423.75 Cr.
• DSCR improved to 6.33x from 1.91x a year ago, indicating strong debt servicing capacity.
• Europe revenue grew 10.31% YoY despite muted market conditions.

Risk Factors

• EBITDA margin compressed 150 bps YoY to 11.73% due to raw material cost surge.
• Cost of materials consumed as % of revenue surged 790 bps QoQ to 55.3%, severely impacting margins.
• Europe segment EBIT margin collapsed to 0.74% from 2.60% a year ago, indicating significant operational stress.
• CFO Gaurav Kumar resigned as Whole-time Director, effective August 6, 2026, creating leadership uncertainty.
• Inventory build of Rs.419 Cr (changes in inventories) indicates stockpiling, tying up working capital.