Apollo Tyres Plans More Price Hikes To Offset Input Cost Shock

Apollo Tyres Ltd, one of India's leading tyre manufacturers, plans to take further price increases in the coming months as a sharp rise in raw material costs, energy expenses, and logistics volatility linked to the West Asia crisis threatens to weigh on margins in the first half of FY27.

The company has already announced price hikes of 6-8% for the current quarter, of which 3-5% has been implemented in the Indian market. The remaining increases are expected to come through in May. However, management said the current hikes cover only about half of the cost pressure, necessitating further price increases.

“We are mitigating this through calibrated price increases and disciplined cost control. Raw material costs are expected to rise in the high teens on a sequential basis, and we have already announced price increases of 6-8% for the current quarter. More price increases would be needed,” Gaurav Kumar, Chief Financial Officer, Apollo Tyres, said during the company’s Q4FY26 analyst call.

Apollo said its raw material basket had risen only 1% sequentially in Q4FY26, but the cost environment has changed sharply in Q1FY27.

According to Kumar, in the March quarter, natural rubber was around ₹200/kg, synthetic rubber at ₹170/kg, carbon black at ₹110/kg and steel cord at ₹155/kg. Natural rubber has since moved up to about ₹250/kg after starting the current quarter at around ₹220/kg.

Strong Demand Gives Pricing Room

Apollo said demand remains strong across categories and channels. April saw strong volume growth, and the company expects the momentum to continue through Q1FY27.

In India, Apollo reported high-teens year-on-year volume growth in both original equipment and replacement segments during Q4FY26. Exports grew in the mid-single digits but were affected by muted overseas markets and geopolitical disruptions.

In replacement, both truck-bus radial and passenger car radial categories grew more than 20% in Q4. In the OEM channel, TBR volumes grew more than 20%, while PCR growth was in single digits.

Management said the entire 2% sequential topline growth in India operations in Q4 came from volume growth, not pricing.

The company also said demand remains strong enough for the industry to pass on price increases. Kumar said all major tyre makers have announced price hikes, with Apollo and CEAT slightly ahead of some peers.

During a Q4 analyst call, CEAT management said price increases are becoming unavoidable. The company expects raw material prices to rise more than 15% in Q1FY27 and move closer to 20% by the end of the quarter. It has taken replacement-market price hikes between March and April and plans another increase through May and June.

CEAT’s management also warned that demand could moderate in the near term because of the West Asia conflict, fuel-price uncertainty and steep input cost inflation, though structural demand drivers remain supportive.

Balkrishna Industries Ltd has already raised prices by 3-5% across key geographies and is preparing another increase in May. The company said raw material prices rose 4-5% sequentially in Q4FY26 and could rise 7-8% in Q1FY27, while freight costs could also increase if geopolitical disruptions continue.

Q4 Performance

Apollo Tyres reported consolidated net sales of ₹7,335.7 crore in Q4FY26, up 14% year-on-year from ₹6,423.6 crore, but down 5% sequentially from ₹7,743.1 crore in Q3FY26, according to an exchange filing.

Consolidated EBITDA rose 28% year-on-year to ₹1,068.8 crore from ₹837.4 crore, but declined 10% sequentially from ₹1,185.9 crore. EBITDA margin stood at 14.6%, compared with 13% in Q4FY25 and 15.3% in Q3FY26.

Reported consolidated profit after tax stood at ₹631 crore, up 242% year-on-year and 34% sequentially. The quarter also included a non-cash write-off of €43 million related to fixed assets at the Enschede plant in Europe.

The company’s India operations remained stronger. The domestic business reported revenue of ₹5,237 crore, up 14% year-on-year and 2% sequentially. India EBITDA rose 48% year-on-year to ₹764 crore, while EBITDA margin improved to 14.6% from 11.2% a year earlier.

Kumar said the India business surpassed its record Q3 performance in Q4 despite higher brand activation expenses linked to the cricket sponsorship.