Are Apollo Tyres Ltd. latest results good or bad?

Apollo Tyres Ltd. has reported its financial results for Q2 FY26, which reflect a complex operational landscape. The company achieved a net profit of ₹258.05 crores, representing a significant sequential recovery from the previous quarter, where profits were markedly lower. However, this figure also indicates a year-on-year decline of 13.25%. Revenue for the quarter reached ₹6,831 crores, showing a sequential growth of 4.12% and a year-on-year increase of 6.12%. This growth in revenue is accompanied by a notable improvement in operating margins, which expanded to 14.94%, marking the highest quarterly operating profit on record at ₹1,020.74 crores. The operating margin improvement of 171 basis points quarter-on-quarter and 130 basis points year-on-year suggests enhanced operational efficiency and pricing power. Despite these positive developments in revenue and margins, the overall profit trajectory remains concerning, with a 22.27% decline in profits over the nine-month period. The company’s return on equity stands at a modest 8.41%, indicating below-average capital efficiency compared to industry peers. Additionally, there has been a notable decline in institutional holdings, which raises questions about market confidence in the company's future prospects. In summary, Apollo Tyres Ltd. has demonstrated a strong sequential recovery in Q2 FY26, achieving record operating margins and revenue growth. However, the year-on-year profit decline and ongoing challenges in capital efficiency and institutional support suggest that the company faces significant hurdles moving forward. The company saw an adjustment in its evaluation, reflecting these mixed operational trends.