Apollo Tyres Ltd has outlined a capital expenditure plan of ₹3,500 crore for FY27, of which ₹3,000 crore has been earmarked for expanding truck and passenger vehicle tyre manufacturing capacities in India.
“For FY27, we have outlined a capex of ₹3,500 crore, with nearly 80% towards growth and capacity expansion projects. Close to ₹3,000 crore would be in India for expansion of truck and car tyres capacity. In Hungary plant, passenger car tyre expansion is well underway and the balance would be in Europe,” said Chief Financial Officer Gaurav Kumar during an earnings call.
Capacity utilisation remains high
According to him, the ATL’s capacity utilisation remained at around 90% across India and Europe operations, supported by healthy demand outlook.
“Overall, given the healthy demand outlook, we expect full capacity utilisation and therefore will continue to progress on our planned expansion initiatives. We would definitely be going ahead as per our capex plans. If we see slowing down, we would have some flexibility for FY28. FY27 would largely be committed,” he said.
Raw material costs may pressure margins
On the outlook, Kumar said geopolitical developments in West Asia have added significant volatility to raw material, energy and logistics costs, which could impact margins in the near term.
“We are mitigating this through calibrated price increases, and disciplined cost control. Raw material costs are expected to rise in high teens on a sequential basis. And we have already announced price increases of 6% to 8% for this current quarter. More price increases would further be needed,” he said.
Europe outlook improves
“As for India, the margins will remain under pressure on account of the increased cost as we attempt to offset them through price increases. The closure of the Enschede plant production remains on track, For Europe, we expect a better growth momentum in Q1. April has already been positive for all segments,” he added.
AI initiatives gain traction
Vice Chairman and Managing Director Neeraj Kanwar said that they are closely monitoring the evolving macroeconomic situation while maintaining disciplined cost controls. Despite the tough macroeconomic environment, ATL expect to sustain and accelerate top-line growth in India and Europe.
The company is also scaling the use of artificial intelligence across manufacturing, logistics and customer service functions to improve efficiency and optimise costs.
“These efforts have also received external recognition with Apollo Tyres being recognised by Amazon Web Services as a case study for our use of AI and data technologies,” he said.