APOLLOTYRE

Apollo Tyres' Q2 FY2025-26 results present a two-sided story: robust revenue growth alongside a notable dip in net profit. The company delivered an impressive 6% year-on-year revenue increase to ₹6,831 crore, fueled by strong demand in both Indian OEM and replacement segments. Operating profit (EBITDA) also surged 16% to ₹1,021 crore, with solid margin expansion driven by disciplined cost management, especially within its Indian operations. However, consolidated net profit fell 13% to ₹258 crore. This decline wasn't due to fundamental operational issues but primarily a significant ₹176 crore restructuring cost tied to its Netherlands plant. While European revenues grew, their profitability was squeezed by ongoing geopolitical and cost pressures. Opinion: For investors, these results showcase strong underlying business momentum and excellent cost control in India. The net profit reduction is largely a one-off restructuring hit, not a sign of core weakness. While European challenges warrant attention, Apollo Tyres demonstrates resilience. This makes it an attractive medium-term accumulation opportunity, as underlying profitability should normalize post-restructuring, provided the European market stabilizes.