Apollo tyres, industry peers signal more price hikes amid rising input costs

Apollo Tyres Ltd. has announced price hikes of 6-8% for the first quarter of FY27 but expects at least two more rounds of increases due to rising raw material costs. The company’s chief financial officer, Gaurav Kumar, stated that raw material costs are projected to rise in the mid-to-high teens, putting pressure on margins in the first half of FY27.

Key Highlights

• Apollo Tyres announced 6-8 percent price hikes for Q1FY27 with more increases expected
• Raw material costs are projected to rise in the mid-to-high teens, affecting industry margins
• CEAT and Balkrishna Industries also plan further price hikes due to input cost inflation
• Apollo Tyres reported 14 percent year-on-year sales growth and 28 percent EBITDA increase in FY26.

Rising Costs and Price Increases

Apollo Tyres, one of India’s leading tyre manufacturers, has already implemented 3-5% of the announced price hikes in the Indian market. The remaining increases are expected to take effect in May. However, these hikes are estimated to cover only about half of the current cost pressures. The company plans further price increases to address the gap.

During the Q4FY26 analyst call, Kumar explained that the company is managing the situation through calibrated price increases and strict cost control. He noted that the raw material basket rose only 1% sequentially in Q4FY26, but costs have increased sharply in Q1FY27. In the March quarter, natural rubber was priced at Rs 200/kg, synthetic rubber at Rs 170/kg, carbon black at Rs 110/kg, and steel cord at Rs 155/kg. Natural rubber prices have since increased to about Rs 250/kg after starting the current quarter at ₹220/kg.

Industry-Wide Impact and Demand Trends

Demand remains strong across categories and channels for Apollo Tyres. The company reported high-teen year-on-year volume growth in both original equipment and replacement segments during Q4 FY26 in India. April saw continued strong volume growth, and the company expects this momentum to persist through Q1FY27. Exports grew in the mid-single digits but were affected by muted overseas markets and geopolitical disruptions.

In the replacement market, both truck-bus radial and passenger car radial categories grew more than 20% in Q4. The original equipment manufacturer channel saw truck-bus radial volumes grow over 20%, while passenger car radial growth was in single digits. The entire 2% sequential topline growth in India operations in Q4 came from volume growth, not pricing.

Peer Companies Respond to Cost Pressures

Other major tyre makers, including CEAT and Balkrishna Industries Ltd., have also announced price hikes. CEAT expects raw material prices to rise over 15% in Q1FY27 and approach 20% by the quarter’s end. The company has implemented replacement-market price hikes between March and April and plans further increases in May and June. CEAT management warned that demand could moderate due to the West Asia conflict, fuel-price uncertainty, and rising input costs, though long-term demand drivers remain positive.

Balkrishna Industries has raised prices by 3-5% across key geographies and plans another increase in May. The company reported a 4-5% sequential rise in raw material prices in Q4FY26, with an expected 7-8% increase in Q1FY27. Freight costs may also rise if geopolitical disruptions persist.

Financial Performance Highlights

Apollo Tyres reported consolidated net sales of ₹7,335.7 crore in Q4 FY26, up 14% year-on-year but down 5% sequentially. Consolidated EBITDA rose 28% year-on-year to Rs 1,068.8 crore, while EBITDA margin stood at 14.6%. The company’s consolidated profit after tax reached ₹631 crore, up 242% year-on-year and 34% sequentially. The quarter included a non-cash write-off of €43 million related to fixed assets at the Enschede plant in Europe.

India operations remained strong, with domestic revenue at Rs 5,237 crore, up 14% year-on-year and 2% sequentially. India's EBITDA rose 48% year-on-year to Rs 764 crore, and EBITDA margin improved to 14.6% from 11.2% a year earlier. Kumar noted that the India business surpassed its record Q3 performance in Q4, despite higher brand activation expenses.

CarBike 360 Says

With raw material costs showing little sign of easing, tyre manufacturers like Apollo Tyres are likely to continue passing on the burden to consumers. While demand remains steady, sustained price hikes could test market resilience in the coming months. The industry’s ability to balance cost pressures with competitive pricing will be crucial in shaping its near-term growth trajectory.