Apollo tyres to invest Rs 3,500 crore in FY27 to boost capacity in India and Europe

Apollo Tyres Ltd. will invest Rs 3,500 crore in FY27 to expand manufacturing capacity in response to strong demand and high utilization rates in India and Europe. Of this, nearly Rs 3,000 crore will be allocated to India, with the remaining Rs 500 crore directed to Europe. The company aims to support growth and meet rising demand across its operations.

Key Highlights

• Apollo Tyres to invest Rs 3,500 crore in FY27 for capacity expansion in India and Europe
• Capacity utilisation reached about 90 percent in both India and Europe in FY26
• FY26 revenue rose 9 percent to Rs 28,470.6 crore, with net profit up 22.4 percent
• The company announced 6–8 percent price hikes for Q1FY27 to offset input cost pressures
• CEAT also plans higher capex of Rs 1,350–1,400 crore in India for FY27

FY27 Capex and Expansion Plans

Gaurav Kumar, Chief Financial Officer of Apollo Tyres, stated that capacity utilization reached about 90% in both India and Europe during Q4 FY26. He explained that the company expects full utilization to continue, prompting the need for further expansion. In India, Apollo will expand both truck and car tyre manufacturing. In Europe, the focus will be on passenger car tyre capacity at the Hungary plant.

The FY27 capital expenditure marks a significant increase from Apollo Tyres’ average annual capex of Rs 900 crore over the previous four years. In FY26, the company spent Rs 1,354.9 crore, compared to Rs 730.6 crore in FY25 and Rs 673.9 crore in FY24. According to Equirus Securities, the higher capex is necessary to support growth but may increase leverage and put pressure on free cash flow and profitability due to rising raw material costs.

Demand Trends and Financial Performance

Apollo Tyres reported strong demand in Q4 FY26, with high-teen year-on-year volume growth in both replacement and original equipment segments in India. The replacement segment saw more than 20% growth in both truck-bus radial and passenger car radial categories. In the OEM channel, truck-bus radial volumes also grew over 20%, while passenger car radial volumes increased in single digits. Export volumes grew in mid-single digits, affected by geopolitical factors.

Kumar noted that demand remained strong in April across all categories and channels, supporting the company’s confidence in continued momentum into Q1 FY27. However, he cautioned that geopolitical developments in West Asia have increased volatility in raw material, energy, and logistics costs, which could pressure margins in the near term.

Price Adjustments and Industry Context

To address cost pressures, Apollo Tyres has announced price hikes of 6–8% for Q1FY27. Of this, 3–5% has already been implemented in India, with the remainder expected in May. Management indicated that these increases would cover only about half of the input-cost pressure, and further hikes may be necessary if commodity prices stay high.

Other tyre manufacturers are also expanding. CEAT Ltd. plans to invest Rs 1,350–1,400 crore in India in FY27, up from Rs 1,076 crore in FY26, as its capacity utilization exceeded 90%. CEAT’s investment will focus on creating capacity to match demand, with a cautious approach in Q1 due to uncertainty and raw material inflation.

Revenue and Market Breakdown

Apollo Tyres closed FY26 with consolidated revenue of Rs 28,470.6 crore, a 9% year-on-year increase. EBITDA reached Rs 4,143.2 crore, up 16%, with the EBITDA margin rising to 14.6% from 13.7%. Net profit for FY26 was Rs 1,371.8 crore, up 22.4%. The company’s FY26 sales mix was dominated by the replacement channel, contributing 79% of revenue, while OEMs accounted for 21%. Regionally, India contributed 63% of revenue, Europe 30%, and other markets 7%.

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

CarBike 360 Says

Apollo Tyres’ planned Rs 3,500 crore investment highlights its long-term growth strategy and confidence in rising global demand. By strengthening its manufacturing footprint in India and Europe, the company is positioning itself to improve supply efficiency and competitiveness. This move is expected to support future revenue growth while reinforcing its presence in key international markets.