Apollo Tyres Tightens Belt, Capex Below Target as Profitability Takes Center Stage

Apollo Tyres Ltd, one of India’s major tyre manufacturers, kept capital expenditures below its guidance in fiscal year 2025, prioritizing profitability and strategic spending amidst a challenging operating environment. The move highlights a broader industry trend toward cost optimization as raw material inflation weighs on margins, even as companies pursue premiumization and capacity expansion. The company also significantly reduced its gross debt during the period, strengthening its financial position.

According to Apollo Tyres' presentation, its capex during FY25 stood at ₹600 crore, compared to ₹700 crore in the previous year. Free cash flow during FY25 stood at ₹300 crore, down sharply from ₹20,000 crore in FY24. This cautious approach to investment was accompanied by a notable reduction in gross debt, which fell from ₹3,900 crore in March 2024 to ₹3,400 crore in March 2025—further solidifying the company’s balance sheet. “We continue to focus on optimizing operating performance and judicious capex spends,” the management remarked in the investor presentation.

Apollo Tyres reported a net profit of ₹1,121 crore during FY25, compared to ₹1,722 crore in the same period last year. Meanwhile, the company’s revenue from operations rose 3%, reaching ₹26,123 crore, up from ₹25,378 crore in FY24.

Cost optimization refers to the process of reducing expenses and improving efficiency in a business without compromising the quality of products or services. The goal is to maximize profitability by identifying and eliminating unnecessary spending, improving resource allocation, streamlining operations, and making smarter investments.