Apollo Tyres Ltd (NSE: APOLLOTYRE) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Neeraj Kanwar — Vice Chairman and Managing Director
Gaurav Kumar — Chief Financial Officer and Whole-time Director
Analysts:
Unidentified Participant
Raghunandan NL — Analyst
Amin Pirani — Analyst
Presentation:
operator
Good afternoon everyone. On behalf of ICICI securities, we would like to welcome you all to Apollo tires Q3FY26 earnings conference call. Today we have with us from the management team Mr. Neeraj Kanwar, Managing Director and Vice Chairman, Mr. Gaurav Kumar, Chief Financial Officer and the Investor relation team. We will start the call with a brief opening remarks from the management team about the quarter gone by and then we’ll proceed with the Q and A session. Thank you. And over to you sir.
Neeraj Kanwar — Vice Chairman and Managing Director
Thank you. Good afternoon and thank you for joining us today. I welcome you all to the Apollo tires Q3 FY26 post results conference call.
We closed Q3 with consolidated top line growth of nearly 12% and an EBITDA margin of 15.3%. I am pleased to share that in Q3 we have recorded our highest ever quarterly revenue both on standalone and consolidated basis. On the domestic front, we saw robust double digit growth in all channels. All our three product categories saw very very strong growth. In contrast, in Europe, the demand environment continued to be muted. Across key categories, we registered a flattish top line Y on Y in line with the subdued market scenario. As we track evolving market dynamics, our focus remains on delivering profitable growth supported by new product introductions, premiumization of the portfolio and discipline cost initiatives.
We expect to sustain and accelerate our top line growth in India and in Europe. Let me now talk about key pillars of our vision. FY26 starting with R D, we continue to secure additional model approvals from marquee PV passenger vehicle manufacturers across India and Europe, reaffirming our strong product competencies and accelerating our premiumization journey. We have also consistently achieved podium positions in independent European tests, underscoring product excellence, strengthening partnership with premium OEMs and expanding our own footprint. On the digitize front, we continue to invest in artificial intelligence to improve customer service, drive efficiencies in our plants and at the same time help in cost optimization.
Moving to the branding side, we continue to demonstrate strong brand equity anchored in superior product quality and customer satisfaction. Our sponsorship of the new Official Indian Cricket Team Jersey has garnered us extensive media attention and coverage, driving unparalleled brand reach and visibility and adding distribution. This landmark association is a source of of pride for all. The Apollo Heights has boosted dealer morale and is already translating into positive business outcomes. Finally, sustainability has always been a key pillar for us. I’m happy to share that we have won multiple accolades during the quarter including first prize by our Chennai plant in the six national awards, Water Awards in the best industry category, recognition from Azochem with the prestigious Water Management Award and at the Indian Water Leadership Conclave and many others.
These achievements reflect our unwavering commitment to environment, health, safety and sustainable growth. As part of Apollo’s Healthcare Initiative, we have recently inaugurated our 35th healthcare center in Rajasthan, enhancing healthcare access for the trucking community. We have also partnered with the UN Development Program to advance biodiversity conservation. With this, I conclude my opening remarks. But as we closely track market dynamics and our cost structures, our focus remains firmly on sustainable and profitable growth. We are proactively preparing for emerging challenges and opportunities and I’m confident that our strong fundamentals and strategic direction will support long term value creation across our markets.
Thank you for listening to me. I am handing over to Gaurav. Thank you.
Gaurav Kumar — Chief Financial Officer and Whole-time Director
Thank you Neeraj and good afternoon, ladies and gentlemen. Continuing from where Neeraj left, let me share further details of our operations. For the last quarter, the consolidated revenue for the quarter stood at rupees 77.4 billion, a very strong growth of almost 12% over the same quarter last year. The consolidated EBITDA for the quarter stood at rupees 11.9 billion, an improved margin of 15.3% compared to 14.9% in the last quarter and 13.7% in the same quarter last year. Coming to the balance sheet, our consolidated net debt level stood at a level of Rupees thirteen billion as at the end of this quarter, substantially lower than the rupees 26 billion at the end of previous quarter.
The sharp decrease in net debt was driven by reduction in short term borrowings as a result of strong operational cash flows. The net debt to EBITDA for the consolidated operations dropped to 0.4x at the end of December 25th compared to 0.8x at the end of September. We witnessed robust demand momentum in Q3 leading to the highest ever revenues on both standalone and consolidated basis. We registered double digit Y or Y growth in our standalone and consolidated revenue, the highest growth over the last 12 quarters. The momentum was driven by a more positive demand environment in India coupled with the added boost from the reduced GST rates for the industry.
As Neeraj mentioned, enhanced brand visibility through our strategic sponsorship has also led to the strong performance especially in the consumer tyres category In India. The revenue for the quarter was rupees 51.4 billion, a growth of 13 plus percent over the same quarter last year. The EBITDA for the quarter stood at rupees 7.5 billion, a margin of 14.5% compared to 15.3% in the last quarter, but significantly higher than the 11.1% in the same quarter last year. The profitability was impacted, as we’ve discussed over various calls and meetings with you people, by the timing of the spend on the sponsorship which started in this quarter relative to our other ANP spends and is only a near term impact.
The ANP spend would normalize from next year onwards. We witnessed that Q3 volume growth Y was in mid teens led by a strong double digit growth across all categories. Replacement OEM Exports Our premium brand Friedishtein continued to get good traction and achieved highest ever volumes in this quarter. On the demand outlook, we anticipate healthy momentum to continue into Q4 of the fiscal year. We witnessed continued strong demand during the month of January with double digit growth. Moving on to the raw material side, we expect the raw material cost to be steady in Q4 on the balance sheet for the India operations, the net debt level stood at Rupees 18 billion in India, significantly lower as compared to the September level.
The net debt to EBITDA for India operations reduced to 0.7x from the 1.1x at the end of previous quarter. In our standalone results for this quarter, the exceptional item below the EBITDA includes a one time charge of Rupees 259 million on account of the estimated obligation under the new Labor Court. This is based on actuarial valuation and best estimates in accordance with the accounting standards. Coming to Europe, the revenue for the quarter was Euro180 million flattish compared to the same quarter last year. The EBITDA for the quarter stood at Euro 32 million, a margin of 17.9% compared to the 17.7% for the same quarter last year and substantially higher than the 12.7% for the last quarter.
Continuing with our premiumization journey, the UHP mix for the quarter increased to 52% compared to the 48% for the same quarter last year. Our PCR capacity expansion in Hungary is progressing as planned and we expect an acceleration in demand momentum going forward as we ramp up this capacity over the last four, five years. Our strategic intent around the judicious use of CapEx in an effort to sweat our assets, prioritize deleveraging and return on capital. Why Our pursuit of profitable growth has borne fruit as seen in our strong balance sheet. We’ve had low levels of growth capex over this period and substantial improvement in our underlying operating metrics.
We remain committed to this strategic intent while also ensuring that we are making the right investments for continued profitable growth in our core categories, particularly to capitalize on the demand environment as our capacity utilization has continued to increase through the year. Our current capacity utilization level in India are in the high 80s. And given our growth expectations for the near future as seen by the current demand momentum, we would start hitting capacity limitations soon. And hence it was prudent for us to plan investments in our core categories for the next 34 years. Taking this into account, the board of directors in the recent meeting approved rupees 5,800 crores capex for our AP plant for expanding both the PCR and TBR capacities spread over the next three financial years.
That is FY27, 28 and 29. As part of this there would be a growth capex of about 2000 crores in FY27. Our capex guidance for FY26 remains as such. We will continue to provide you a clear picture of future CAPEX plans as done over our calls over the last few years. And our strategy would continue to be focused on profitability, free cash flow generation and return ratios. With this I would conclude my opening comments. Thank you and we would be happy to take your questions.
Questions and Answers:
operator
Thank you. Participants will begin with the Q A session. If you have any questions you can click on the raise hand button.
We’ll take the first question from Raghunandan from Nuama.
Raghunandan NL
Congratulations sir. Congratulations. Good afternoon. My first question sir, on the capacity increase. Roughly if I calculate there would be about 370 ton per day getting added because of the PCR and PBR addition. And the capex per ton seems to be around 1617 crore. I was trying to understand this is further higher compared to the previous CapEx which we have done. So was trying to understand what has led to this increase in capex per ton.
Neeraj Kanwar
Sure. Raghu, your calculations are broadly correct. It is about a 350 tons capacity addition leading to about rupees 17 crore per metric ton of capex.
The increase comes as a result of both the inflationary pressures. And you would see that our last big CAPEX was back in FY 2021. And also because the technology keeps moving. The capacities that we have set up have always been state of the art. Not just catering to a small segment of the market. It it caters to the global OEMs both in India and also the overseas developed markets of Europe and us. Got it sir. Sir, my second question was on the India volume growth and if you can give a breakup between OEM replacement and export.
And also your thoughts on how do you look at the outlook for replacement and exports for FY27. Our volume growth for OEM and replacement was in mid teens. And in exports it was just short of 20%. So we’ve had a healthy growth as I mentioned across all the three channels.
Raghunandan NL
Got it, sir. And how do you see the Outlook SIR for FY27? Outlook?
Neeraj Kanwar
As of now Raghu seems to be very good. As I mentioned, even January has seemed good. And as of now the expectations is that this demand momentum will continue.
Raghunandan NL
Understood, sir. And last question before I fall back to the queue on amp spends.
How much was A and P in Q3 as percentage of your standalone? And how do you see this ratio panning out over year period? Because I think you have a tie up with BCCI for a period of three years.
Neeraj Kanwar
Sure. So Q3 Rahu would would be an anomaly given that there was activation apart from the usual sponsorship fee. So it would have jumped up. We used to be roughly around 2% spend of ANP as a percentage of sales. In a normalized scenario we we would be upping it to about 2.5% to drive the top line growth.
And that is where it should settle as we go forward.
Raghunandan NL
Thank you sir. Thank you so much. I’ll call back to the queue.
Neeraj Kanwar
Thank you, Raghu.
operator
Next question is from Basudev Banerjee. You may unmute your line and go ahead.
Unidentified Participant
Yeah. Thanks. Gaurav, few questions. Yeah. To continue with Raghu’s question like two and a half percent would be the ANP ahead. How much was the ANP this quarter?
Neeraj Kanwar
Exactly just one minute. It is clubbed with a little bit of other expenses. But ANP along with certain sales promotion was of the order of 150 crores.
Unidentified Participant
And you are saying that elevated number will last till Q4.
Neeraj Kanwar
Yeah. In the short term. Because even as we take our call on what are the ANPs we want to continue. What are the ones we would reduce? It will take some time, Basudev. Because of existing contracts. And that’s why I said the FY27 scenario would be a more normalized scenario for our ANP spend.
Unidentified Participant
Sure. Second, things are as you typically give out your raw mat basket prizes. And from outlook perspective as you said, steady. So if you say like currency on one side crude and natural rubber price, international prices slightly inching up. So all those things, how to look at that.
Whether gross margin can play a spoil sport as such or you don’t think there is any chance of that under current outlooks.
Neeraj Kanwar
See the international volatility. And we continue to live in times where some of these global events are very difficult to predict. Even within Week, two week. We have seen the rupee swing very sharply both ways. Middle of the quarter we were looking at some further tailwind from the raw materials. Based on the international scenario, the current outlook given by our procurement team is a flattish scenario. So as of now, that’s the best estimate we have.
On your first part of the question, the prices for some of the commodities, natural rubber was around 195 rupees a kilogram, synthetic rubber at 170, carbon black at 115 and steel cord at around 155 rupees a kilogram.
Unidentified Participant
Sure. And last question. So as it’s good to see a massive debt reduction but in the P and L, if I see QOQ standalone interest outgo was in fact higher. So when should we see the reflection of the reduction in debt at the P L level?
Neeraj Kanwar
It should start coming in because of a large part of the inventory.
Because the long term debt repayment Basudev was happening as per schedule. There was no. The big reduction was on some of the working capital borrowings as inventory reduction happened. And that may have happened in the last one month or 45 days. So it will start reflecting fairly in the next quarter.
Unidentified Participant
Sure, sir. Thanks. All the best. Thank you.
operator
We take the next question from Amin Pirani. Amin, you may unmute your line and go ahead.
Amin Pirani
Yes. Hi. Thanks for the opportunity. Hi. Hi. My question is on this capacity expansion. So first the clarification. The capacity utilization that you mentioned in your release of 82% for PCR and 89% for TDR.
Is it just the Andhra capacity that you’re talking about or is it this, your full company capacity in India? Capacity utilization in India. Right.
Neeraj Kanwar
So the release that was there because there is a certain format, I mean and very valid question was for the ap, for us, what is more relevant is the overall India operations capacity utilization that as I mentioned is in the high 80s both for car tires and truck tires.
Amin Pirani
Okay. Okay. And so just a follow up on that, you mentioned 7 million and 1.6 million that you have in Andhra and you mentioned how much you will add.
Just want to get a sense that including Chennai and everything else, how much will the addition be? Do you have that number handy? Like how much PCR do you have visa with the 3.7 being added and how much TBR you have? Visa, visa, TBR being added?
Neeraj Kanwar
Sure. I mean then let me talk of the capacity in terms of number of days. Okay. So our India capacity is a little short of 60,000. So let’s say about 58,000. And we are adding 10 and a half thousand. So we are adding about 17, 18% of capacity to our India PCR capacity.
Similarly our existing TBR capacity is 15,000 plus and we are adding 3,600 tires per day capacity. So about a 20%.
Amin Pirani
Okay, that’s, that’s, that’s helpful. And just on the, the CAPEX number itself. So I’m guessing this year we will be at like less than 1500 crores for the full year on a console basis given I give 10,000 crores.
Neeraj Kanwar
That’s correct.
Amin Pirani
And next year you’ve talked about a growth capex of 2000 crores. So then would it be fair to say that overall CapEx including maintenance and everything could inch like in excess of 2500 because there’s a PCR expansion ongoing in Hungary as well.
Right. So how should we put all that in context?
Neeraj Kanwar
So I would put the overall CAPEX number for next year closer to 3000 crore. As you rightly said. There is the PCR expansion in Hungary which was already underway. Some of it is coming in this year, some of it in next year and then our usual maintenance operational capex across different functions always totals up to about 700 odd crores. So I would put that number at 3000 crores for next year. Okay, and, and I know it’s a bit early in the day but then in this 27 to 29 cycle would 27 be the peak year or will 3000 on an overall console basis is the number that assume for, for this cycle 29 would be a much more tapering off but 27 and 28 both years would be high CapEx 28 in fact might be even higher than the 3,000.
Amin Pirani
Okay, and that’s the mid portion of that CapEx.
Amin Pirani
Okay, so just one last thing on this. What is your ROCE right now? And as we’re getting closer to the end of the 26 plan period, any initial thoughts on how we should think of roce? Because on the one hand growth is picking up but capex is also.
Neeraj Kanwar
So our current year roce we are running at 13 and a half percent. I mean okay, it is, it is in the band where we had set out our targets but still not reaching the 15% target where we want it to be.
And I think we, we cross that number or add that number for two out of the five years as we are finalizing the budgets. We are also on the drawing board for our five year vision from April 26 to March 31. And we would definitely be looking at RO C leveraging and the free cash flows taking into account the operational metrics but also the fact that CapEx is kicking in. So we’ll have to come back to you on that.
Amin Pirani
Sure, sure thanks. Look forward to that and I’ll come back.
Gaurav Kumar
Thank you.
operator
We take the next question from Joseph.
Joseph, you can unmute your line and go ahead.
Unidentified Participant
Thank you. Questions one is on the income tax the standalone entity has been at about you know, 33, 34 tax for some time. We haven’t moved to the 25% tax. Now with the changes that have happened in mat this year’s budget do you expect to go to a 25, 26% tax soon?
Neeraj Kanwar
Yes Joseph, the tax team is examining and with the change most probably we would be moving to that tax bracket. So effective FY27?
Gaurav Kumar
I think so.
Unidentified Participant
Oh sure. The second question that I had was on CapEx so so you know over the last three four years I think you also mentioned this in your opening remarks.
Last three, four years the focus was on you know, bite sized capex and debottle linking etc. And you know if I remember pre Covid tire companies including ourselves used to announce 3000 crores, 4000 crores, you know, big lumpy capex but for the last 34 years we have not seen tire companies do that and in that sense this is a change. So I want to understand what takes us away from the practice that we have had for the last 34 years and coming in announcing a very big CapEx.
Gaurav Kumar
So Joseph, it’s not moving away from that intent.
There is are also times when within the same building you can do marginal increases in capacity with with few equipment ordering as we would call in manufacturing parlance as line balancing. But we reached a stage where we could not further increase the capacity by line balancing and hence any further increase in capacity needed, needed civil and moment you go reach that stage it has to be of a certain quantum. Now also to be fully transparent about the capex we could give you just an FY27 CapEx and say another nine months down the line that we’ll give you the FY28 CapEx because that’s when it is being incurred.
But the fact is that the CAPEX plan that we have needs to be of a certain quantum to be optimizing on the manufacturing capacity, the civil construction and hence it is better that we are transparent about the overall plan that is there in the mind as we kick off this capex it’s not moving away from that. This can then be followed again by the small bite sized capex. Because within that same building if it is possible. So it is not dictated by a change in strategic intent but more as to where we stand with the VR capacity and capacity utilization cycle.
Neeraj Kanwar
Gaurav. Just to add to that Joseph, we are also seeing shortages in TBR and passenger car and in farm. Given what we have been able to do with bcci, we are seeing a lot of traction coming from the rural market specifically in three categories which is pcr, two wheeler and inform category. And that’s where the growth is coming. In our estimates in TBR we are running at close to 100% utilization. So we need expansions coming. And like I said in my opening remarks, it’s all towards a profitable growth growth. And Gaurav has already explained you the fundamentals behind the factory.
Unidentified Participant
Understood. Just the last one, just some clarifications. One is the 3,000 crore that you mentioned. It is at the consolidated level, right? It includes growth maintenance and the European capex.
Gaurav Kumar
That’s correct.
Unidentified Participant
And the last thing was if you can share the numbers for ripen. Com for the quarter. You mentioned Rifancom,
Gaurav Kumar
Joseph, revenue and margin application which you typically do every quarter. So Rifancom revenues for the quarter were 82 million euros with an EBITDA margin of 8%. This is their best quarter but yet the markets were weak.
Gaurav Kumar
So thank you.
Unidentified Participant
Thank you, Joseph.
operator
We take the next question from Arvind Sharma.
Arvind, you can unmute your line and go ahead.
Unidentified Participant
Good afternoon. I hope you can hear me. Thank you. Thank you for taking my question. The first question on the pricing environment. You alluded to a very strong demand growth. How is the pricing especially in the replacement market?
Gaurav Kumar
Pricing has largely remained stable, Arvind. It’s held up. We haven’t taken any pricing action and people have been competitive. But the raw material tailwind have played into the margins as you would see for all the players.
Unidentified Participant
All right, thank you so much. And just one question more on accounting purpose you alluded to a fairly strong capex for next three years.
Would it. Will it be a by part capex? I. You know you. Some lines, as you said, some lines start coming in earlier. So the revenue starts accruing in parts over this period. Or do you. Do you believe that the entire revenue hopefully demand C, that is comes only in FY29.
Gaurav Kumar
We will start seeing some revenue flow into FY28 and the reason for taking these approvals and starting next year itself is we see that we will start hitting capacity constraints towards end in FY27. So we will have some capacity coming on stream in FY28 which will play into the revenue and then it will ramp up.
And only towards the second half of FVI, FY29 will all of the capacity be on stream. So actually the full benefit of these Capexes will be there in FY30. But FY28 onwards, given demand remains where it is, you would see some some revenues start accruing.
Unidentified Participant
Yes, sir, thank you so much for taking my question. That’s all from my side. Thanks again.
Gaurav Kumar
Thank you.
operator
Next question is from Kapil. Kapil, you may unmute your line and go ahead.
Unidentified Participant
Yeah, good evening sir, this is Kapil from Nomura. Yeah, my question is on Europe, when will the labor restructuring that we’ve had in Netherland plant start getting visible in terms of benefits and how much benefit do we expect from that?
Gaurav Kumar
Sure.
As announced, the plan remains on track. The ensked A plant in Netherlands will stop Production end of June 2026. 1/4 into FY27. The transition of the various product categories to the plant in Hungary and India is already underway. And we think that in second half of FY27 you would start seeing the benefit of that flowing through. I would hold on to giving a margin guidance as we do not do across. But we think there will be a definite boost up to the European operations profitability with that.
Unidentified Participant
Sure, sir. Thanks. And second question was we’ve recently seen the India Europe and India US trade deals getting announced.
If you could share some of your broad thoughts on how the company can take advantage of these in terms of export potential. You know, how are you looking at competitiveness of Apollo Tires now after these deals become effective from this year or next year?
Gaurav Kumar
So Europe is a very strategic and almost a home market for us. So a deal is welcome. The duty levels were anyway small, but with this announced closure of NSK day, the exports to Europe would even increase. So any kind of FTA is welcome. We would not have the details right now as to quantifying the benefits.
Us of course, with the duty reductions would further sort of, let’s say, provide a boost. Our revenues had not suffered, but profitability had definitely taken bit of a beating in the current year that will start going up. And do you see a potential that we could gain a market share significantly in either Europe or US after this? I’m not talking of short term, but maybe next two, three years. See, in both these geographies we’ll still continue to be a small player. Will we gain market Share.
Gaurav Kumar
Yes, but in Europe replacement market we are all, all of under 3% market.
Our gaining of market share also given the market size would still be in decimals, we will gain market share. We expect both these geographies to keep growing at, at a significant pace for us. But within an overall context, India is and will remain our largest market.
Unidentified Participant
Sure sir. Thank you.
operator
Thank you. We take the next question from Yash Agarwal. Yash, your line is unmuted. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir and congregation. On your results you just highlighted that the domestic demand is really strong. So can you just. On the each segment level, can you say which segment is having a better demand like PV versus truck and what is the channel energy level as of now?
Gaurav Kumar
So right now Yash, we are seeing, we are seeing a strong demand across categories.
For example, even in Q3 the only area in the domestic market where we had a slow growth for us was PCR OE which was more a result of some of our past actions of not not taking up certain accounts because of profitability reasons. Otherwise the growth across replacement and OEM for all product categories was very strong. As Neeraj mentioned also with the, with the jersey sponsorship we are seeing very good traction on the passenger car, two wheelers and farm including in the rural segment. But even the truck demand has picked up very strongly both from OEM and replacement.
Unidentified Participant
Okay sir, second question on the channel vector level. Inventory levels are fairly, fairly normal. There is no abnormality in that. And my last question is on the Europe demand scenario. What’s the outlook for Q4? As few of the other players in the industry highlighted pickup in the demand and things getting better at the back end of the FY25. So do we also see similar trends right now?
Gaurav Kumar
Europe continues to be a weak market Even in the Q3, the quarter gone by the passenger car Europe market which is our most relevant category, the market growth was minus 1%.
It sort of improved from a mid to high single digit negative to this levels but it continues to be in the low single digit. I am in fact sorry, the Europe market was -4%. So there are signs of it improving but still not to a point that it is getting into the positive zone. Yes.
Unidentified Participant
Okay sir, thank you from my side.
Unidentified Participant
Thank you. Yes,
operator
if we take the next question from Mihir Vora, please unmute your line and go ahead.
Unidentified Participant
Yeah, hi, am I audible? Yes mayor.
Unidentified Participant
Yeah, thank you for taking my question. So sir, basically if we go through the capex currently you mentioned that it is around 17 crores per ton per day.
And previously when we had done this FY20 Andhra Pradesh capex at around 12 11.5 to 12 crores ton per day. So this sort of an increase into a capex. So how are we seeing the pricing in a longer term in our products? Basically that how will the pricing move up going ahead in terms of realization because the capex cost has gone up and me, I won’t have the data readily right now but we can come back to you as a team.
Gaurav Kumar
The pricing does move up year to year. It doesn’t seem evident but each time the raw material cycle kicks in, the pricing moves up even though there is pricing pressure and then it sort of is sticky as the raw material cycle goes down.
So we can, we can present that data to you as to how it has moved over the five year period. Right. But if we just apart from that just an idea from you that if the RM stays stable where is like it does not. But if it stays stable then what kind of hikes do we need to take to maintain that return levels on a plant? I wish we had this nice stable scenario of RM remaining constant. But we would probably need to take mid single digit kind of price increase every year.
Unidentified Participant
Okay. All right.
And secondly on the debt levels what are we seeing in terms like right now we are at a 1300 crore market net debt. But going ahead with the larger CapEx, how do we see our debt in FY27 going there?
Unidentified Participant
We will take on some debt as we go through FY27 capex and even FY28 in our estimate. With a normalized industry scenario we would still be below our long term stated goal in this vision period of below 2.0 net debt to EBITDA even at the peak levels.
Unidentified Participant
Okay. Okay. So that’s all from my side. Thank you.
Gaurav Kumar
Thank you.
Unidentified Participant
Okay we take the next question from Naveen. Bad. Naveen, you may unmute a line and go ahead. Yeah, thank you for the opportunity. Just to confirm the. The volume growth that you highlighted which was in mid teens. That’s only for the standalone business. That’s on the standalone business.
Gaurav Kumar
Yeah. Europe was. Europe was flattish.
Unidentified Participant
Okay, thank you.
operator
Okay we take the next question from Vijay Pandey. Vijay, you may unmute a line and go ahead.
Unidentified Participant
All right. Thank you sir for taking my question. Thank you. Question first I wanted to check if you have any raw material hedging and currency hedging policy especially connected to the rubber, global rubber prices.
We’ve looked at raw material hedging. Vijay. When we came to the conclusion that we would rather not get into this speculation because very little of this also comes with delivery of the product. So after looking at it for quite some time, we. We came to the conclusion to stay away from rubber or crude oil hedging. On the currency side, all our borrowing, if it’s in a foreign currency is fully hedged 100% on both principal and interest. And even on our operational exposure. We are a net importer in India. Our hedging ranges between 75 to 100%.
Gaurav Kumar
Okay. Because the currently the global rubber prices have been increasing over last at least four weeks. When what is the time frame after which we start seeing the impact on the pnn? Or is it like a quarter or two quarters? So for our India operations it’s maximum a quarter, sometimes even lesser than that because what is sourced from from the local sources pretty much starts sitting within a month. For European operations the lag is about a quarter.
Unidentified Participant
Okay. And lastly sir, just. No. So our standalone other income was pretty significant this quarter. Is it anything related to something significant?
Gaurav Kumar
Yeah, it was a one time dividend that was received through the overseas subsidies and that’s why the number is significantly higher.
This is just a for this year or does it come every third quarter?
Gaurav Kumar
No, no, this is only for this year.
Unidentified Participant
Okay. Okay. Thank you.
Gaurav Kumar
Thank you. Vijay.
operator
We have a follow up question from Naveen Bait. Naveen, you may unmute your line and go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Just wanted to check in terms of the the pecking order for margins especially for the domestic market, you know what would be the differential of between exports and the aftermarket business? Some color.
Gaurav Kumar
So replacement always remains as the most profitable category. Exports is usually much lower than that.
Of course it can depend on the currency part of it. So TBR is the wherein exports may inch up closer to the domestic replacement. But in general domestic replacement would be always higher margin than exports.
Unidentified Participant
Got it, Got it. Thank you.
operator
Thank you. We have the next question from Nitin Agarwal. Nitin, you may go ahead. I think is dropped from the line. Okay. A reminder to the participants if they have any questions they can click on raise hand button.
Unidentified Participant
Okay, so we have a question from your line is unmuted. Please go ahead. Yeah, thank you sir for the opportunity.
Sir, I just wanted to understand on the Europe side on the demand there and. And over next few years. I mean what kind of capacity expansion where we need to expand, consume the demand there and any any further updates on what kind of savings we can see with the Netherland plant closure how can positively the margins get impacted? Thank you.
Gaurav Kumar
So Mumuksh, as mentioned earlier the Netherlands demand for last one year has been in the negative zone. It’s improved from where it was from significant negative to slight negative across product categories but it is still negative.
Pcr, Agri, truck, all of them long term trend of the European market is generally a 1 to 2% growth. So that that should remain as of now apart from the capacity expansion which are. Which is underway in Hungary in near term there is no plans of any further capacity expansion unless something very different plays out on the market demand scenario as of now the current expansion we have undertaking is. Is good for us for a few years. And sorry if I missed on the savings. How can the closure can help on margin?
Gaurav Kumar
Sir, on the closure side again as I mentioned we will start seeing the results playing into our P and l numbers from second half of FY27.
There would definitely be a boost at this stage. We would refrain from giving out specific margin guidance. Got it sir. And sir, if I, if I mean you may have covered just on the the advertising spend on sponsorship side how you seeing the impact on the ground in terms of brand recall or how you how you’re benefiting from this new new initiative. Neeraj also mentioned very strongly we are seeing a very strong brand pull and and we stand committed to this sponsorship and the fact that the positive impact it is doing both in the rural areas on the consumer tires we see a very strong impact of.
Of this ANP spread.
Unidentified Participant
Got it sir. Sir, on the cost side if, if you can mention how were the Q3 RM breakup there and and just you know recently the natural rubber has gone up. If I mean how do you see the trend there into the cost side. I’m not sure if you missed out some of the earlier question answers or you joined late or what because.
Unidentified Participant
So. Okay. Okay. I’ll note it down sir. I just joined late later sir.
Gaurav Kumar
Yeah. Thank you.
Unidentified Participant
Thank you so much for the opportunity sir. Thank you.
operator
We have the next question from Nitin.
You may go ahead.
Unidentified Participant
On the market share trend that we are seeing in both the TBR and PCR and along with your you know OEM and replacement. Because last time you indicated that we are. We’ve lost some market share in the PC segment primarily because of low margin bids that we avoided. So your thoughts there. So in terms of market share we believe we have either maintained or gained market share in the in the current quarter. So some of that reversal has started. We still need to we gain some of the lost ground on the PCR OEM side.
Gaurav Kumar
Nitin as I mentioned some of the decisions on account of profitability that were taken one or two years back and in OEM it always plays out longer. So we are taking strategic calls on OE business. We will not again completely swing ignoring the profitability aspect but we are recovering some of the market share that has been lost. Okay so just can you put a number on your market share for TBR and PCR in the replacement segment if possible There is no official data available. We would put our TBR replacement share close to 30% and our PCR replacement close to 20%.
Unidentified Participant
Okay. Okay. Okay thanks. That was from my side.
Gaurav Kumar
Thank you.
operator
Thank you. Okay so I guess there are no further questions in the queue. I’ll hand it over back to the management for any closing remarks.
Unidentified Participant
Only say thank you for joining our call and hope to see you in the next quarter. All the best. Thank you.
operator
Thank you.