Apollo Tyres' stock racing ahead on improving outlook, growth in EU

While volumes are rising, there are interesting structural changes taking place in the sector

There are interesting structural changes in the tyre industry. After eight years of flat realisations, realisations rose 24 per cent between FY 2019-20 and 2021-22. This should push up EBITDA and reduce capex as per cent of revenue provided raw material costs come down.

Apollo Tyres in particular, has seen growth in the EU business due to cutback in Russian exports. In addition, there are hopes the domestic automobile industry will see a pickup once demand improves and supply issues with chips eases. In that case, OEM volumes in India will increase. Hence, despite higher input costs, the company could