Apollo Tyres Plans More Price Hikes as Raw Material Costs Surge in FY27

Apollo Tyres, one of India’s major tyre manufacturers, is preparing additional price increases over the coming months as rising raw material expenses, higher energy costs and logistics uncertainty linked to the West Asia conflict continue to pressure margins during the first half of FY27. The company indicated that recently announced price hikes are insufficient to fully offset the sharp inflationary environment affecting the tyre industry. Management said further calibrated actions would be required to protect profitability while maintaining operational stability across domestic and export markets.

The company has already announced tyre price increases of 6-8% for the ongoing quarter, with nearly 3-5% already implemented in the Indian market. The remaining increase is expected to be rolled out during May. According to management, these actions currently compensate for only around half of the cost escalation seen in raw materials and freight operations. Apollo Tyres said it would continue evaluating market conditions and industry demand before implementing additional increases in the coming months.

During the Q4FY26 analyst interaction, Chief Financial Officer Gaurav Kumar stated that the company is managing the situation through disciplined cost control measures and phased pricing adjustments. He noted that raw material expenses are projected to increase in the high teens sequentially during Q1FY27. Apollo Tyres also highlighted that its raw material basket had increased only 1% sequentially during Q4FY26, but market conditions changed significantly at the start of the new financial year.

According to the company, natural rubber prices climbed sharply after the March quarter. Natural rubber, which stood near ₹200 per kilogram during Q4FY26, increased to approximately ₹250 per kilogram after beginning the current quarter around ₹220 per kilogram. Other key inputs during the March quarter included synthetic rubber at nearly ₹170 per kilogram, carbon black at about ₹110 per kilogram and steel cord at approximately ₹155 per kilogram. The company said rising commodity prices are now creating a more challenging operating environment for tyre manufacturers.

Strong Demand Supports Pricing Actions

Apollo Tyres said market demand remains healthy across vehicle categories and sales channels, providing room for the industry to pass on higher costs through price revisions. The company reported strong volume momentum during April and expects demand conditions to remain favourable throughout Q1FY27. Management indicated that sustained replacement demand and healthy OEM production continue to support overall tyre consumption despite global uncertainties.

In India, Apollo Tyres recorded high-teen year-on-year volume growth across both original equipment manufacturer and replacement segments during Q4FY26. Export growth remained in the mid-single-digit range but was impacted by weaker overseas demand and geopolitical disruptions affecting global trade routes. The company stated that replacement demand for both truck-bus radial and passenger car radial tyres expanded more than 20% during the quarter.

Within the OEM segment, truck-bus radial tyre volumes increased by over 20%, while passenger car radial growth remained in single digits. Management clarified that the entire 2% sequential revenue growth in the Indian business during Q4FY26 was driven by higher volumes rather than pricing improvements. This reflects strong market demand even before the full impact of the latest price increases is realised in the market.

The company also stated that most major tyre manufacturers have already initiated price hikes to offset rising costs. Management noted that Apollo Tyres and CEAT were slightly ahead of certain competitors in implementing pricing actions. Industry participants believe sustained input inflation and freight volatility leave little room for absorbing costs without passing a portion to customers.

Industry-Wide Cost Pressures Intensify

During its own Q4FY26 analyst interaction, CEAT management said further price increases had become unavoidable because of escalating raw material inflation. The company expects raw material costs to rise more than 15% during Q1FY27 and potentially approach 20% by the end of the quarter. CEAT has already implemented price increases in the replacement market between March and April and is preparing additional hikes during May and June.

CEAT management also cautioned that demand could soften temporarily due to the West Asia conflict, fuel-price volatility and elevated input costs. However, the company maintained that long-term structural demand drivers for the tyre sector remain positive. Similar trends were highlighted by Balkrishna Industries, which has already implemented 3-5% price increases across important international markets and is preparing another round of hikes in May.

Balkrishna Industries stated that raw material costs increased 4-5% sequentially during Q4FY26 and could rise another 7-8% in Q1FY27. The company also warned that freight expenses may increase further if geopolitical tensions continue disrupting global logistics networks. Tyre manufacturers across the industry are therefore balancing pricing actions, operational efficiencies and market demand to manage profitability during the current financial year.

Apollo Tyres Q4FY26 Financial Performance

Apollo Tyres reported consolidated net sales of ₹7,335.7 crore during Q4FY26, representing a 14% increase compared with ₹6,423.6 crore recorded in the same period last year. However, revenue declined 5% sequentially from ₹7,743.1 crore in Q3FY26. The company attributed the yearly growth to strong domestic demand and improved sales volumes across multiple product categories.

Apollo Tyres Q4FY26 Financial Snapshot

Consolidated EBITDA increased 28% year-on-year to ₹1,068.8 crore, although it declined 10% sequentially from the previous quarter. EBITDA margin improved to 14.6% compared with 13% in Q4FY25 but remained lower than the 15.3% reported in Q3FY26. Reported consolidated profit after tax stood at ₹631 crore, reflecting a 242% increase year-on-year and a 34% rise sequentially.

The quarter also included a non-cash write-off of €43 million related to fixed assets at the Enschede manufacturing facility in Europe. Apollo Tyres said its Indian operations remained significantly stronger during the quarter, supported by higher volumes and improved operating leverage. The domestic business generated revenue of ₹5,237 crore, representing 14% yearly growth and 2% sequential growth.

India EBITDA rose 48% year-on-year to ₹764 crore, while EBITDA margin improved to 14.6% from 11.2% during the same quarter last year. Management stated that the Indian business exceeded its previous record Q3 performance despite elevated brand activation expenses linked to cricket sponsorship activities. Apollo Tyres expects strong domestic demand and continued pricing actions to support business performance through the coming quarters despite the challenging cost environment.

Frequently Asked Questions

Why is Apollo Tyres increasing tyre prices in FY27?
Apollo Tyres is increasing tyre prices because raw material, freight and energy costs have risen sharply during Q1FY27. The company stated that natural rubber, synthetic rubber and other critical inputs have become significantly more expensive compared with the previous quarter. Existing price hikes are covering only part of the inflationary pressure. As a result, Apollo Tyres plans additional calibrated price increases to protect profitability while maintaining stable operations and supply chain efficiency across domestic and export markets.

How did Apollo Tyres perform in Q4FY26?
Apollo Tyres delivered strong financial performance during Q4FY26 despite rising industry costs and global uncertainties. Consolidated net sales increased 14% year-on-year to ₹7,335.7 crore, while EBITDA rose 28% to ₹1,068.8 crore. Profit after tax reached ₹631 crore during the quarter. The company also reported strong volume growth across replacement and OEM segments in India. Domestic operations remained a major growth driver, supported by healthy market demand and improved operating margins during the period.