Q2 FY27 results analysis · November 04, 2026
Apollo Tyres Q2 FY27 Results Analysis: EBITDA Margin Compresses 421 bps, PAT Slips 17.52% (APOLLOTYRE)
+13.3%PAT year on year, Rs. 292.29 Cr
Source: Quarterly results filing (BSE)
Quick summary
Apollo Tyres Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 7,968.15 Cr (+16.65% YoY) and PAT growth of +13.27% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 7,968.15 Cr (+16.65% YoY) |
| PAT (Q2) | Rs. 292.29 Cr (+13.27% YoY) |
| EBITDA margin | 10.73% (-421 bps YoY) |
| EPS (Q2) | Rs. 4.62 (+13.51% YoY) |
Quarter Snapshot
Revenue grew 16.65% YoY on pricing and volume momentum, but EBITDA margin compressed 421 bps YoY to 10.73% as raw-material costs rose to 53.23% of revenue; normalized PAT fell 17.52% YoY. Management's capex and net-borrower plans are on track, but the Europe high-teens EBITDA target for FY27 looks difficult, and cash conversion (CFO/PAT 0.41x) is weak amid a deliberate re-levering for growth capex.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue / demand | "Revenue / demand: likely ahead"; "the binding constraint on upside is supply, not demand" | Rs.7,968.15 cr, +16.65% YoY, +7.71% QoQ; standalone +25.59% | Played out |
| Margins | "Margins / costs: likely compressing" — sector read of 200–250 bps compression (per pre-call note, web-sourced) | EBITDA margin 10.73% vs 14.94% YoY (−421 bps), −100 bps QoQ — deeper than the sector band | Played out |
| High-cost stock flowing into Q2 | "the Q1 inventory build means higher-cost stock is flowing into Q2 production" | Materials 53.23% of revenue; margin still fell QoQ; stock-in-trade purchases +53.9% QoQ | Played out |
| Europe | "high teens" a H2-FY27 story; watch "below-EBITDA transition costs in Q2" | Rs.26.18 cr ATEU charge confirmed from the filing; margin 2.42% — charge confirmed, benefits pending | Partially |
| Capex & funding | Q2–Q3 step-up; "funding is unlikely to be the constraint" | H1 standalone capex Rs.1,419.51 cr vs ~Rs.500 cr Q1 India spend; borrowings +64% YTD; Rs.1,000 cr fresh NCD approved | Played out |
| Governance (CFO exit) | "who presents the quarter after the CFO's Oct 6 exit" | New CFO appointed effective November 4, 2026 — resolved | Played out |
| Anti-dumping-duty benefit; utilization/supply-gating | Watch items | Not addressed in the filing — remain open for the call | Not observable |
Read our full results preview.
Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Effective tax rate 25.17% (concessional regime) effective FY27 | FY26 filing note on the Finance Act 2026 transition, reiterated on the Q1 FY27 call | Consolidated ETR 26.22% on reported PBT (24.56% pre-exceptional) | On Track |
| FY27 capex Rs.3,500 cr (~80% growth capex) | Q1 FY27 earnings call | H1 consolidated capex Rs.1,878.43 cr = 53.7% of target | On Track |
| India capex "close to Rs.3,000 cr" of the Rs.3,500 cr | Q1 FY27 earnings call | H1 standalone capex Rs.1,419.51 cr = 47.3% of target | On Track |
| Net debt/EBITDA to increase slightly; "anticipates being a net borrower" | Q4 FY26/Q1 FY27 call | Covenant net debt/EBITDA 1.23x at Sep-26; D/E 0.25x vs 0.16x at Mar-26 — direction | Confirmed |
| Europe "high teens EBITDA on a full-year basis" post the Hungary move; benefits from H2 FY27 | Q1 FY27 earnings call | Europe segment result margin 2.42% in Q2 (EBIT-like basis, below EBITDA); a further Rs.26.18 cr restructuring charge booked | Too Early |
| "Demand remains healthy across categories and channels. July already delivered a strong start…" | Q1 FY27 management commentary | Revenue +16.65% YoY consolidated, +25.59% standalone; +7.71% QoQ | Confirmed |
| "…we largely successfully defended margins through calibrated price increases and disciplined cost control" | Q1 FY27 management commentary | EBITDA margin fell further to 10.73% (−100 bps QoQ, −421 bps YoY); no segment held margin — margin defense did not hold | Contradicted for Q2 |
| RM basket to rise ~8% sequentially in Q2; price increases to offset | Q1 FY27 call | Materials cost stayed elevated (53.23% of revenue vs 46.38% YoY); trading purchases +53.9% QoQ; the filing does not quantify the basket — pressure is visible; offset incomplete | Partially |
| Enschede P&L benefits from H2 FY27 | Q1 FY27 call | Q2 still booked restructuring charges (Rs.26.18 cr); Europe margin 2.42% | Too Early |
| Net-borrower framing for FY27 | Q4 FY26 call | Borrowings +64.0% YTD; fresh Rs.1,000 cr NCD approval | Confirmed |
Key Numbers, Quarter by Quarter
| Metric | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|
| India capacity utilization | 81% | 87% | 85% | 91% | Not disclosed in filing |
| Europe capacity utilization | 88% | 94% | 93% | 94% | Not disclosed in filing |
| EBITDA margin (consolidated, company def.) | 14.94% | ~15.3% | ~14.6% | 11.73% | 10.73% |
| Net profit margin (consolidated) | 3.8% | ~6.1% | ~8.6% | 4.72% | 3.67% |
Key Investment Insights
Key Positives
- Consolidated revenue grew 16.65% YoY to Rs.7,968.15 cr; standalone revenue grew 25.59% YoY
- APMEA revenue grew 23.85% YoY to Rs.5,973.23 cr
- H1 PAT grew 136.6% YoY to Rs.641.16 cr (flattered by prior-year Enschede charges)
- Europe segment result improved QoQ from Rs.15.18 cr to Rs.52.06 cr as Enschede wind-down progressed
- H1 capex of Rs.1,878.43 cr is 53.7% of the Rs.3,500 cr FY27 target; CWIP nearly tripled to Rs.2,324.26 cr
- Covenant net debt/EBITDA of 1.23x vs 3.5x limit; DSCR 5.96x
- New CFO appointed effective November 4, 2026, resolving the vacancy from the October 6 exit
Risk Factors
- EBITDA margin fell to 10.73% (−421 bps YoY, −100 bps QoQ); every segment's margin compressed YoY
- Normalized PAT declined 17.52% YoY; reported PAT growth of +13.27% is a lapping artifact of the Rs.180.04 cr prior-year charge
- Cost of materials consumed rose to 53.23% of revenue from 46.38% YoY; trading purchases +53.9% QoQ
- H1 CFO/PAT of 0.41x; FCF of −Rs.1,614.24 cr on working-capital build and capex front-loading
- Borrowings +64% YTD to Rs.4,316.03 cr; debt-equity rose to 0.25x from 0.16x
- Europe 'high teens EBITDA' FY27 target requires >1,500 bps margin step-change in two quarters — assessed as difficult
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