Quarterly Financial Highlights Showcase New Peaks
The tyre and rubber products manufacturer reported net sales of ₹7,743.08 crores for the quarter ended December 2025, marking the highest quarterly revenue in its history. This represents a significant improvement compared to previous quarters and underscores Apollo Tyres’ ability to capitalise on market demand and pricing power.
Operating profit before depreciation, interest and taxes (PBDIT) surged to ₹1,185.94 crores, also a record high, translating to an operating profit margin of 15.32%. This margin expansion is particularly notable given the inflationary pressures and raw material cost volatility that have challenged the sector in recent years.
Profit before tax (excluding other income) reached ₹700.70 crores, while net profit after tax (PAT) stood at ₹488.18 crores, both the highest quarterly figures recorded by the company. Earnings per share (EPS) correspondingly rose to ₹7.41, reflecting strong bottom-line growth and enhanced shareholder value.
Operational Efficiency and Capital Structure Strength
Apollo Tyres’ debt-equity ratio at half-year stood at a low 0.29 times, indicating a conservative capital structure and reduced financial risk. The company’s operating profit to interest coverage ratio also improved markedly to 11.85 times, signalling robust earnings capacity to service debt obligations comfortably.
These metrics collectively suggest that Apollo Tyres has strengthened its balance sheet while maintaining operational leverage, positioning it well for future growth and resilience against economic headwinds.
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Financial Trend Shift: Positive to Flat
Despite these record-breaking quarterly figures, Apollo Tyres’ overall financial trend score has shifted from positive to flat over the past three months. The company’s financial trend score improved to 11 from 4 in the last quarter, reflecting a stabilisation after a period of rapid improvement. This suggests that while the company is performing well, the pace of financial improvement has moderated.
Investors should note that certain efficiency ratios have deteriorated. The return on capital employed (ROCE) at half-year declined to 11.19%, the lowest in recent periods, indicating that capital utilisation efficiency has softened. Similarly, the debtors turnover ratio fell to 8.15 times, signalling a slower collection cycle which could impact working capital management.
Stock Performance Outpaces Sensex Over Long Term
Apollo Tyres’ stock price has demonstrated strong relative performance against the benchmark Sensex index. Over the past year, the stock has delivered a 20.63% return compared to Sensex’s 7.07%. The outperformance is even more pronounced over longer horizons, with five-year returns at 108.04% versus Sensex’s 64.75%, and a remarkable ten-year return of 262.47% compared to 239.52% for the Sensex.
However, short-term price movements have been mixed. The stock declined 3.33% over the past month, slightly underperforming the Sensex’s 1.74% fall. On the day of reporting, the share price closed at ₹502.20, down 1.05% from the previous close of ₹507.55, with intraday trading ranging between ₹500.65 and ₹510.85.
Industry Context and Sectoral Positioning
Operating within the Tyres & Rubber Products sector, Apollo Tyres faces competitive pressures from both domestic and international players. The sector has been navigating challenges such as fluctuating raw material costs, regulatory changes, and evolving consumer preferences towards electric vehicles and sustainable products.
Apollo’s ability to deliver record sales and profit margins in this environment is a testament to its operational agility and strategic initiatives, including product innovation and cost optimisation. The company’s market cap grade of 3 reflects a mid-tier valuation relative to peers, while its Mojo Score of 71.0 and upgraded Mojo Grade to Buy (from Hold on 12 Jan 2026) indicate positive analyst sentiment and confidence in future prospects.
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Outlook and Investor Considerations
Looking ahead, Apollo Tyres’ strong quarterly performance provides a solid foundation for sustained growth, but investors should remain mindful of the flat financial trend and the dip in capital efficiency metrics. The company’s low leverage and strong interest coverage ratio are positives that mitigate financial risk, while the recent margin expansion highlights effective cost management.
Given the sector’s evolving dynamics, Apollo Tyres’ strategic focus on innovation and market expansion will be critical to maintaining its competitive edge. The stock’s historical outperformance relative to the Sensex suggests it remains a compelling investment for those seeking exposure to the tyre and rubber industry, particularly with the recent upgrade to a Buy rating.
Market participants should monitor upcoming quarterly results and sector developments closely to assess whether the company can convert its flat financial trend back into a positive trajectory.
Summary of Key Financial Metrics (Quarter ended Dec 2025)
- Net Sales: ₹7,743.08 crores (highest quarterly)
- PBDIT: ₹1,185.94 crores (highest quarterly)
- Operating Profit Margin: 15.32%
- Profit Before Tax (excl. other income): ₹700.70 crores
- Net Profit (PAT): ₹488.18 crores
- EPS: ₹7.41
- Debt-Equity Ratio (HY): 0.29 times (lowest)
- Operating Profit to Interest Coverage (Q): 11.85 times (highest)
- ROCE (HY): 11.19% (lowest)
- Debtors Turnover Ratio (HY): 8.15 times (lowest)
Stock Price and Returns Overview
- Current Price: ₹502.20
- Previous Close: ₹507.55
- 52-Week High: ₹540.30
- 52-Week Low: ₹368.00
- 1 Week Return: +2.06% vs Sensex +1.59%
- 1 Month Return: -3.33% vs Sensex -1.74%
- Year-to-Date Return: +0.52% vs Sensex -1.92%
- 1 Year Return: +20.63% vs Sensex +7.07%
- 3 Year Return: +48.45% vs Sensex +38.13%
- 5 Year Return: +108.04% vs Sensex +64.75%
- 10 Year Return: +262.47% vs Sensex +239.52%
Conclusion
Apollo Tyres Ltd. has demonstrated remarkable quarterly growth and profitability, setting new company records in revenue and margins. While the broader financial trend has flattened, the company’s strong fundamentals, conservative leverage, and operational improvements underpin a positive investment thesis. The recent upgrade to a Buy rating reflects growing confidence in Apollo Tyres’ ability to navigate sector challenges and capitalise on emerging opportunities.
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