Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Apollo Tyres Ltd (NSE: APOLLOTYRE) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Unidentified Speaker
Neeraj Kanwar — Vice Chairman and Managing Director
Gaurav Kumar — Chief Financial Officer and Whole-time Director
Analysts:
Raghunandan NL — Analyst
Unidentified Participant
Amin Pirani — Analyst
Presentation:
Unidentified Speaker
Good afternoon everyone. On behalf of Elara Securities, I welcome you all for the post Q4FY26 result conference call of Apollo Tires Ltd. From the management side we have with us today Mr. Neeraj Kanwar, Vice Chairman and Managing Director and Mr. Gaurav Kumar, Chief Financial Officer. I would now like to hand over the call to Mr. Neeraj Kanwar for his opening remarks. Over to you, sir.
Neeraj Kanwar — Vice Chairman and Managing Director
Thank you and a very good afternoon and thank you for joining us today. I welcome you to the Apollo Tires post results conference call. We closed quarter four with a very strong consolidated top line growth of nearly 14% y on y and an EBITDA margin of 14.6%. For the full year, Consol top line growth was 9% yny and our EBITDA margin of nearly 14.6%. For our Indian operations in Q4, we saw a strong double digit growth in the replacement and OE markets as compared to last year. Growth across all product categories have been very encouraging placing us firmly in line with and in some segments ahead of the market performance.
In Europe operations, we witnessed a slow low single digit growth in volumes. Growth in certain international markets was impacted by the geopolitical developments in West Asia which continue to create significant uncertainty and add volatility to raw materials, to energy and to logistics cost. We are closely monitoring the evolving situation and remain focused on responding with agility while maintaining disciplined cost controls. Despite the tough macroeconomic environment, we expect to sustain and accelerate top line growth in India and Europe.
Importantly, our balance sheet remains very strong. And despite the turbulent macro environment witnessed over the last several years, we have continued to improve our leverage profile. On a console level, our net debt to EBITDA ratio has significantly improved from 3.2 multiple to 0.4 in 2026 March, providing us with ample financial strength to navigate future uncertainties with confidence. Let me now touch upon some of the five key pillars in the company. Starting with R and D, we continue to make steady progress across all segments.
In passenger vehicle tires, we secured fresh approvals from leading OEMs including BMW, Mini, Genesis, Kia and Mahindra. In replacement as well, we introduced and upgraded premium products across India and Europe operations. On the digital front, we continue to invest in strengthening both customer facing platforms and internal operating capabilities. During the quarter, we started the rollout of our new B2B E commerce platform in Europe while continuing work in India to improve customer experience, inventory visibility and service efficiency.
We’re also scaling the use of artificial intelligence across the business functions with several initiatives underway in manufacturing, logistics and customer service to drive efficiency and cost optimization. These efforts have also received external recognition with Apollo Tires being recognized by Amazon Web Services as a case study for our use of AI and data technologies. On the brand side, the BCCI partnership generated strong momentum, further amplified by the Harsafar Meh Dham Hai campaign launched around the ICC T20 World cup, which reinforces position around performance, resilience and trust.
The campaign was rolled out across multiple platforms and markets, strengthening brand connect and consumers and enhancing overall brand equity. Moving to the People pillar, I’m happy to share that Apollo Tires has been recognized as the top employer in 2026 with India operations receiving the recognition for the first time while our European entities continued their strong track record. Finally, on sustainability remains a key pillar for us. During the quarter, our climate targets received validation from the Science based Targets Initiative and reaffirming our long term commitment towards net zero across the value chain.
As I conclude my opening remarks, I would like to assure that 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 core markets. Thank you once again and I’ll hand it 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 Neeraj’s update, I’ll share a bit more about how our operations shaped up last quarter. The consolidated revenue for the quarter stood at rupees 73.4 billion reflecting healthy double digit growth of 14% plus compared to the same quarter last year. The consolidated EBITDA for the quarter stood at rupees 10.7 billion, a margin of 14.6% compared to 13% in the same period last year. Coming to the balance sheet, we have been able to further improve our leverage ratio given the focus on cash flows and profitability.
The net debt to EBITDA for consolidated operations improved from 0.7x at the end of last year to 0.4x. Neeraj already mentioned the dramatic improvement we had from March 20th when we were at 3x on net debt EBITDA to the current levels, helped by healthy margin performance. Our consolidated ROCE for FY26 stood at 13.4%, an improvement of around 240 basis points compared to FY25. As Neeraj mentioned, in India we witnessed a strong high teens YOY volume growth in both replacement and OE segments. The revenue for the quarter was rupees 52.4 billion, a growth of 14.3% over the same quarter last year and almost 2% over the previous quarter.
We had reported a record quarter in Q3 and we surpassed the same immediately in this quarter. The EBITDA for the quarter stood at rupees 7.6 billion, a margin of 14.6% compared to 11.2% in the same period last year. As indicated earlier, this quarter had significantly higher spends with the activation spends relating to sponsorship of Cricket Jersey and yet we reported the margins that we mentioned at 14.6%. The ANP spends would normalize going forward and be slightly higher vis a vis the previous annual trend in the current and future years, but only slightly higher compared to our usual trend.
The net debt to EBITDA for India operations has significantly improved from 1.1x in March 25 to 0.7x at the end of March 26. Additionally, following the enactment of the Finance Act 2026, we decided to transition to the concessional tax regime effective FY27. With this transition our applicable tax rate reduces from 34% to 25% and consequently our deferred tax liabilities have provided a positive net impact of almost rupees 570 plus crores and has been recognized in the P L during the year as reflected in the net profit.
In terms of outlook, demand remains strong across categories and channels with April already showing equally strong volume growth and we expect the same momentum to continue through Q1. At the same time, the geopolitical developments in West Asia have added significant volatility to raw material, energy and logistics costs which will impact margins in near term. We are mitigating this through calibrated price increases and disciplined cost control. Raw material costs are expected to rise in high teens on a sequential basis and we have already announced price increases of 6 to 8% for this current quarter.
More price increases would further be needed. Coming to Europe, revenue for the quarter was Euro170 million down 1% y on y. The market conditions remain muted. While we outperformed the market on the passenger car tire category, truck tire sales were impacted by the supply issues from India. The EBITDA for the quarter stood at Euro 25 million with an improved margin performance of 14.6% compared to 14.3% for the same period last year. In terms of outlook, we expect a better growth momentum in Q1.
April has already been positive for all segments. As for India, the margins will remain under pressure on account of the increased cost as we attempt to offset them through price increases. The closure of the Enskede plant production remains on track and as mentioned earlier we have assessed now the fixed assets at the plant as we enter into the last month and a non cash write off of Euro 43 million has been taken on the fixed assets. This quarter the capacity utilization was at a high of 90% across both our India and Europe operations.
Overall given the healthy demand outlook we expect full capacity utilization and therefore will continue to progress on our planned expansion initiatives. For FY27 we have outlined a capex of rupees 35 billion with nearly 80% towards growth and capacity expansion projects. We will continue to monitor the volatile external environment and guide operations keeping an eyes eye on cash flows and roce. As Neeraj mentioned, the balance sheet remains very strong to be able to ride out the near term difficult times.
With this I would conclude my opening comments. Thank you. We would be happy to take your questions.
Unidentified Speaker
Thank you. Neeraj and Gaurav Participants will open the floor for questions. Anyone who has a question can raise their hand and I’ll announce your name and then you can unmute yourself and go ahead with your question. We’ll have the first question from Mr. Raghunandan. Raghu, please unmute your line and go ahead with your question.
Questions and Answers:
Raghunandan NL
Thank you. Thank you for the opportunity and congratulations on strong set of numbers. Thank you Raghu. Firstly sir, if you can talk about within standalone how has been the total volume growth in Q4 and within that how has exports done? And if you can also give some color that within replacement TBR pcr how are you seeing the growth trends?
Gaurav Kumar
So Raghu, as mentioned for both OE and replacement the the volume growth was high teens exports were impacted by events through the year so the overseas markets were muted. We had mid single digit growth in the export volumes and a high teens in both OE and replacement. And to your second part of the question TBR replacement PCR replacement for this quarter we had 20% plus growth OEM TBR 20% plus PCR single digit OEM.
Raghunandan NL
Sir, given that there has been lot of focus on AMP spends and market activation and you are seeing the benefits in terms of better growth. Can you talk about how has been the market share movement in recent months and for FY26 in replacement.
Gaurav Kumar
We don’t have the official data Rahu now published or it comes with a significant lag for the full year we believe we have gained market share in TBR replacement and even in TBR overall passenger car replacement we would have gained share not in passenger car OEM that are our internal estimates.
Raghunandan NL
Got it. So good to hear that. And on the export outlook side for FY27, how do you expect the trend to pan out and which region segments, how do you focus? How how are you thinking about it?
Gaurav Kumar
So we will continue to look at this export strategically. A keeping in mind, as I said, our capacity utilizations are at a high and in and in certain product categories particularly on truck we would need capacity allocation decisions given the strong demand in India. India and Europe would remain priority markets for us because they are the two home markets. And then the capacities would be allocated to other geographies. Right now Europe is showing some promising signs. But how the situation pans out given events of West Asia to be seen.
US market is currently looking weak as we enter the first month.
Raghunandan NL
Thank you so much sir. I’ll fall back to the queue.
Gaurav Kumar
Thank you Raghu.
Unidentified Speaker
Thank you. We have the next question from Mr. Siddharth Bera. Siddharth, please unmute your line and go ahead with the question.
Unidentified Participant
Yes sir. Thanks for the opportunity sir. First question is on the commodity inflation. You mentioned about a mid teens increase in quarter one. Does it factor in the entire cost increase till now or you think there can be further cost inflation in quarter two given the current scenario and also how much price do you need further to pass on the entire cost inflation and go back to the earlier margin trends which we were operating?
Gaurav Kumar
Siddharth, currently the situation is very volatile and as all of us are experiencing in our different industries etc, mid to high teens is the current reality. It can change because this situation even as we have progressed about a month and a half into the quarter has kept changing. The current estimate is around mid to high teens. We’ve taken about half the price increase that is needed. So at least a couple of more rounds of price increases would be needed to negate all the cost push that is there.
How would Q2 look? Difficult to predict as of now.
Unidentified Participant
Okay. And on the capex you mentioned about 35 billion for the year. How does it sort of spread out in terms of the India and Europe business?
Gaurav Kumar
Sure. So close to 3000 crores out of the 3500 would be in India where we are expanding capacity both in truck and car tires. In Europe, in the Hungary plant there is only a passenger car tire expansion which is also already well underway. So the balance would be in Europe.
Unidentified Participant
Understood. So last question on the European margins now we have sort of restructured the plant. So by when do you think we should start seeing benefits on the margins with this restructuring? What we have done,
Gaurav Kumar
Siddharth, the last day for the NSK plant would be June 30, which has been a tough, difficult, emotional decision for us. Take about another quarter as we stabilize things. So in H2 of FY27, the positive impact of margins as we become more cost competitive for our European operations should start flowing in.
Unidentified Participant
Got it, sir. Thanks a lot. I’ll come back in the room.
Gaurav Kumar
Thank you.
Unidentified Speaker
Thank you. We have the next question from Mr. Basudev Banerjee. Please unmute your line and go ahead with your question.
Unidentified Participant
Yeah. Hi team. Yeah. What is the overall standalone volume growth? If I wish to look from a sequential basis specifically, it’s a seasonally strong quarter for commercial vehicles. So just wanted to understand key in a commodity inflation scenario, QOQ revenue is up 2%. So what has been the price hikes in Q4 volume growth sequentially and how are you looking at price hikes in Q1 and going ahead?
Gaurav Kumar
The entire top line growth of 2% Q4 over Q3 has been through volume growth. So the volume growth in Q4 has been 2% on a sequential basis. As I mentioned, we have announced price hikes of 6 to 8% of which 3 to 5% have already been implemented in the India market. And the others are coming through in May. So two rounds of price increase have been announced across product categories.
Unidentified Participant
So on a blended basis, replacement price hike, overall replacement portfolio. You mean 6% blended hike, 6 to 8% across Q1 in two tranches.
Gaurav Kumar
That’s correct.
Unidentified Participant
So that should get fully reflected by Q2 for sure.
Gaurav Kumar
That’s correct.
Unidentified Participant
That’s great. And second thing, sir, as usual you say commodity wise price during Q4 and what is the situation as of today?
Gaurav Kumar
So for Q4 the prices and the current situation is very different. Natural Rubber was at 200, synthetic rubber at 170, carbon black at 110 and steel cord at 155.
Unidentified Participant
And the same things currently for you,
Gaurav Kumar
Current natural rubber prices are at 250 rupees a kilogram. It started I think at the beginning of the quarter at about 220 odd. So it had already gone up. I don’t have the current prices for each of the materials. Natural rubber is a more prominent one. So that one I can tell you what is the current price.
Unidentified Participant
Sure. And as raw mat basket inflation looks almost 20% at least. So as per your internal maths, the 6 to 8% replacement price hike would be good enough. Or you need something more beyond that if it remains the status quo, The Romad basket.
Gaurav Kumar
No, we would need. We would need further price increases. Basudev and given how the industry implements price increases in small quantums, we would need two rounds of price increase
Unidentified Participant
Beyond the 6 to 8%.
Gaurav Kumar
Beyond the 6 to 8%.
Unidentified Participant
Okay, sir, that’s great. Thanks.
Gaurav Kumar
Thank you.
Unidentified Speaker
Thank you. We have the next question from Mr. Amin Pirani. I mean, please unmute your line and go ahead with your question.
Amin Pirani
Hi, Am I audible?
Unidentified Speaker
Yes, I
Amin Pirani
Mean, yes. Hi. Thanks for the opportunity. The first question is on the Europe margin. Now on a YUI basis, you know, we have seen some improvement, but if I go back to the two years prior to that, you know, we are still, you know, quite low. Even I come, even if I compare 4Q to 4Q. So, you know, obviously this restructuring is going on and you know, hopefully we should see better margins as Hungary ramps up. But what is, what would you attribute it to? The reason, you know, why, you know, the margins are because last year 4Q was also lower than the previous year 4Q and the years before that.
So what is, you know, going on there? If you can help us understand.
Gaurav Kumar
No, sure. I mean, and, and that’s at the core of the decision regarding the NSCDA plan. You’ve correctly pointed out that the 14.3, 14.6, etc. Are lower than our previous few years historical levels, which used to be a 16% plus. And the reason is that the European market conditions have been sluggish, flattish to a negative now for two years running. And in that scenario it has been coupled with continuing high energy costs and salary inflations which are much higher than the usual for these Western European geographies.
To give you an example, based on the inflation data, the last two, three years inflation of salaries in Netherlands was around 12 to 13% instead of the usual 4.5percent compounded. So the, so the factor eating into the margins from the previous normalized levels is fundamentally that the top line is remaining the same given the market conditions, but some of the other costs are escalating given the higher inflation. And that sort of brought down the margins and in fact forced us into a situation where we had to take the tough decision regarding the NSKD plan.
Amin Pirani
Okay, okay, that’s, that’s helpful. And just coming back to the commodity inflation, you mentioned that, you know, we should expect a mid to high teens Increase sequentially in 2Q. Sorry, in 1Q over 4Q. But would it be fair to say that based on spot levels of commodity, 2Q could be even higher than where 1Q is?
Gaurav Kumar
Fair assumption, yes. If, if the situation continues at the current level and we’ve seen over the 45 odd days in the current quarter that the. At least the natural rubber has kept going up. The. The crude has sort of fluctuated. Yes. So Q2 could. If nothing changes Q2 could be marginally higher than Q1.
Amin Pirani
Okay. Okay. Understood. Understood. Thanks for this. I’ll come back in the queue.
Gaurav Kumar
Thank you.
Unidentified Speaker
Thank you. We have the next question from Mr. Vijay Pandey. Please unmute your line and go ahead with your question.
Unidentified Participant
Hi. Thank you for taking my question. Am I audible?
Gaurav Kumar
Yes, Vijay
Unidentified Participant
Sir, firstly on Europe. So the commodity inflation there you will be seeing there also the impact. So we. I wanted to understand how much price hike can we take in Europe both on the commodity inflation as well as the higher energy prices. Have we taken any increase there or how is it.
Gaurav Kumar
We’ve announced a 2% price increase in Europe also. Vijay, Europe, we are more a follower given our size relative to some of the global majors. So we follow their pricing actions based on their announcements. You need to keep in mind that for the. For the same level of increase the of raw material the price increases needed in Europe are smaller. So if. If India needs almost 2/3 price in increase vis a vis the raw material basket Europe needs it less than half. But that said we would need further increases even for our European operations.
Unidentified Participant
Okay, thank you. Secondly sir, I wanted to understand just on following up on the previous question. Is it possible for us to go to a 16% EBITDA margin in Europe two years down the line in a long term scenario and may lead to long term scenario or that is that do you see to be like.
Gaurav Kumar
We. We definitely believe that in a normalized scenario we will get back to a 16% which was our earlier normal. And in fact we believe we can even surpass that.
Unidentified Participant
Okay, one more thing. If you can just let us know the advertising and sales and marketing expense. So how much was it for this quarter in terms of as a percentage of sales? And I think generally it’s at around 2 and a half percent. So should we expect this level for 27 also this and what was for this quarter?
Gaurav Kumar
Sure. So the advertisement and sales promotion which as I mentioned reflected the recent sponsorship of the jersey and then the activation was higher by more than 100 crores in terms of usual. So against a typical 2% of sales we were at 4% of sales for the current quarter. I have talked about it earlier. Going forward we would expect as growth kicks in etc for it to be around a 2.5% plus of sales. So we would move up in a longer term trend. But not to the extent what is being seen is in this quarter.
Unidentified Participant
Okay. Okay. And so lastly, if I may, can you give us the bifurcation between the international robot and domestic rubber for your raw material basket?
Gaurav Kumar
There would not be any significant differences, Vijay, I would not have that readily because I get the overall basket cost. But typically the domestic rubber growers price it very close to the landed cost of overseas rubber.
Unidentified Participant
Okay. It’s
Gaurav Kumar
A. It’s a very transparent market. So it’s not that there are significant differences between the two sources.
Unidentified Participant
Okay. Thank you.
Gaurav Kumar
Thank you, Vijay.
Unidentified Speaker
Thank you. We have the next question from Mr. Arvind Sharma. Arvind, please unmute your line.
Unidentified Participant
Yeah. Hi. Good evening, sir. And thank you for taking my question. Hi. It’s on the pricing environment right now. You did save taken. Price X and more are underway. Given the cost pressures, raw material energy, how do you see the overall pricing environment including the competitors?
Gaurav Kumar
So Arvind, everybody has announced price increases. Apollo tires and Seat are slightly ahead of some of the other peers. So price increases have been announced by everybody. There are timing differences and there are slight quantum differences.
Unidentified Participant
Right, sir. And from here on, like going ahead, since you said there are more cost pressures underway and we do see new competitors as well as, you know, jostle for market share. Do you think that the pricing environment would remain such. Or there could be aggressive pricing according to your estimates?
Gaurav Kumar
See, right now given the cost push, the aggressive pricing in terms of discounting, I don’t think would happen. Aggressive pricing would mean delaying price increases, etc. The good side is a demand is very strong. We are fairly close to our peak capacity utilization. So that’s. That’s a plus. And the other point, as Neeraj mentioned, the balance sheet is strong. So there, yes, near term there would be margin pressures. Longer term we’ve always taken the price increases to catch up as has been demonstrated multiple times in the past.
And we are seeing good growth momentum.
Unidentified Participant
Thank you. Thank you, sir. And just quickly, any views on imported tires possibly increasing their presence?
Gaurav Kumar
The import of tire remains at a certain level. There is a little bit more in the passenger car tire category. Very little in the truck tire category. We don’t see any reason for that increasing dramatically in the near term.
Unidentified Speaker
Sure, sir, thank you so much for answering those questions. That’s all from my side. Thanks. Thank you. We have the next question from Mr. Vedant. Please unmute your line.
Unidentified Participant
Hi sir. Thanks for the opportunity. So I just wanted to know that you have taken like a 6 to 8% price hike and the overall raw Material impact is around about mid to high teens. So any sort of other cost levels or any sort of other hedges that you have to mitigate these apart from price increases, the
Gaurav Kumar
Raw material is our biggest cost basket. Ability to negate that completely through other cost levers is limited. That said, everything possible is being done to reduce costs. Whether it is things like travel cost conferences have been postponed. Whatever cost can be not incurred. Currently given the cost pressures are being done. But the the cost basket of raw material versus the others is quite disproportionate.
Unidentified Participant
Okay, thank you sir. Thank you.
Unidentified Speaker
We have the next question from Mr. Mumuksh Mandlesha. Please unmute your line and go ahead.
Unidentified Participant
Yeah, thank you sir for the opportunity. Just on the RM basket, sir, for Q4, what would blended change? Is it flat? Sir, for Q4 over Q3 was a 1% increase. Okay, got it sir. So just on the Europe inflation part and also the energy freight cost, is it possible to quantify what kind of a cost pressure would be there in Q1? Sir,
Gaurav Kumar
I won’t have the numbers on the energy readily. On the raw material side, the the basket would be going up by about low to mid teeth. Since the natural rubber consumption is much lower there, the raw material cost inflation would be little lower in Europe. Visa, the India operations.
Unidentified Participant
Got it. So in Europe, I mean going ahead we are taking 2% price hike. So are you seeing more price hike ahead
Gaurav Kumar
Right now? We haven’t seen competition announcing it. There has been talk of price increases. We are waiting to see what competition is doing.
Unidentified Participant
Got it sir. Just on the OEM side, I just want to understand how much would be the lag there in terms of taking price sack and is the prices fully being passed on or there’s some negotiation to delay the price hikes.
Gaurav Kumar
So with with a large number of our OEM customers, we follow a pricing formula which kicks in with a lag of three months. So the pain would be there for three months and then the entire raw material basket cost push goes up. But that’s not for 100% of the OEMs. In some cases it’s a negotiated figure and that is going on. We have got small price increases already, but not enough to counter the raw material cost push.
Unidentified Participant
Got it. And lastly on the exports also, how are the price tags there? Sir,
Gaurav Kumar
Export market for us, the biggest one is Europe which is both a home market and an export market from India. The other market for example is is US where the demand is weak. But we’ve still announced increases to the tune of mid to High single digits.
Unidentified Participant
Got it. And so here the exports piece, the INR deposition would also support the negate the impact.
Gaurav Kumar
That’s correct.
Unidentified Participant
Got it sir. Thank you. Thank you so much for the opportunity.
Gaurav Kumar
Thank
Unidentified Speaker
You. We have the next question from Mr. Rishi Vora. Please unmute your line.
Unidentified Participant
Yeah, hi. Thank you for the opportunity. First, just first question on the demand, right? You talked about good trends in April and possibly continuing in first quarter. But you know, when we take whatever 6, 8, 10% price increase, how should we think about demand during second half of this financial year, especially in the TBR replacement segment on the backdrop that the tire cost would go up and obviously there has been a diesel price increase as well that has happened and can further go up. So the fleet operators profitability over time will get impacted.
So how should we think about demand just going into, you know, second half of FY27?
Gaurav Kumar
Rishi, that that would largely depend on the overall GDP growth, etc. And we see predictions on that changing. They have been brought down slightly. You are right that if the continued inflation, both on the fuel side tire and other materials continue, there would be some impact on the overall GDP and hence the demand. Currently, in spite of these price increases, which April is behind us and as I mentioned, the demand is as strong as what we were seeing in Q4. So the immediate outlook seems still continues very strong in spite of all these factors, how the second half pans out.
Right now things are just too volatile to be able to make any definitive statement.
Unidentified Participant
But in your experience in this type of inflationary environment, when we take price increases, is our customers that price sensitive in that category or you think that they’ll kind of absorb this hike and demand will still be steady, at least from a historical context.
Gaurav Kumar
From a historical context, new vehicle purchases might start getting impacted. First, if there are goods to be moved, then they will be moved, albeit at higher cost. And finally consumer takes that higher cost because the chain keeps passing on that cost. But definitely people tend to first start postponing the new vehicle purchase, whether it’s on the truck side or the car side.
Unidentified Participant
Understood. And on the Europe business, you know, this year we did around 670 million euros of manufacturing operation revenues. And post the closure of ncid, how should we think about revenue drop? That can happen, obviously. I understand some will shift to Hungary, some will shift to India. But is there a potential revenue loss which we should factor in going into FY27 that can happen
Gaurav Kumar
There. There could be a potential revenue loss on only one product category, which is the agricultural Stroke oht which was a small capacity that we did not manufacture in any of the other plants. And, and in some of those cases we may lose some of the OE business which anyway was a loss making business. So it would be a conscious choice for all the other product categories where we had similar production in our other plants whether in Hungary or India. We would have the ability to supply the markets.
Unidentified Participant
So. And what would that the agri contribution would be like 1, 2% of revenues?
Gaurav Kumar
The agri contribution overall was about 12% of our revenues and the within that the OEPs would be about half of it. So. So
Unidentified Participant
Understood. And just last bit on the closure of the plant, is there any cash outflow which we should expect in FY27 or. Everything has been accounted for in 26
Gaurav Kumar
So there would be cash outflow. Rishi. In FY27 there’s a payout of social plan as per the agreement of about 50 million euro that has already been provided for in the earlier quarters. In the exceptional items there was a cash component and non cash component. So we don’t expect a cash provision over and above what we’ve taken.
Unidentified Participant
So it says 50 million of cash out will happen in 27.
Gaurav Kumar
Yeah, that and then there are certain costs linked to that, legal cost etc. So. So there’s an overall 55 million plus of cash provision that has already been taken.
Unidentified Participant
And what would be the tax for Europe? About 20%. Okay, so blended now would be like 24 Europe and 25 for India going forward?
Gaurav Kumar
That’s correct.
Unidentified Participant
Understood. Thank you and all the best.
Gaurav Kumar
Thank you Rishi.
Unidentified Speaker
Thank you. We have the Next question from Mr. Joseph. Please unmute your line.
Unidentified Participant
Hi, thank you for the opportunity. I have three questions. I’ll take them one by one. So the first one is, you know you mentioned that the demand environment is extremely strong right now. But if these, you know, macro challenges etc continue as a possibility that we might see some slowdown in terms of absolute volume growth. And in that context, how much flexibility do we have with respect to the large CAPEX that we announced last quarter, the 5,800 cross capex, is it something that cannot be pushed out or is it somewhat flexible?
Gaurav Kumar
There is some flexibility Joseph, but as I mentioned as we saw in Q4, our capacity utilization were already 90%. We through April we struggled in terms of, in terms of keeping up with the demand. So right now we would definitely be going ahead as per our CAPEX plans. If we see slowing down, we would have some flexibility for FY28. FY27 would largely be committed.
Unidentified Participant
Understood. The second question that I had was in relation to exports. Now if you look at you know, the rupee rather euro inr rate that has moved very favorably. So in that context, two questions. One is do we, I mean does the standalone entity get the benefit of the rupee depreciation on the exports to Europe? One and second, in that context, you know, India becoming far more low cost for production. Is there a scope for increasing the production in India to cater to to the European market?
Gaurav Kumar
So under the transfer pricing regulation, Joseph, for our European operations particularly India can only retain a fixed margin. So as a standalone entity it would not get the benefit the overall group would benefit by the devaluation of the rupee. On your second question. Yes, definitely. If you see the quantum of capacity increase in Hungary versus India are very different. And we will continue to leverage and take advantage if the India cost structure becomes even more cost competitive for serving not just Europe but even other export markets.
Unidentified Participant
Great. The last question Gaurav I have is on the. Sorry, Rifencom revenue and EBITDA numbers we can share. Thank you.
Gaurav Kumar
The Rifancom number for this quarter was 40 million and EBITDA just under 2%.
Unidentified Participant
Perfect. Thank you. That’s all I had.
Gaurav Kumar
Thank you Joseph.
Unidentified Speaker
Thank you. We have the next question from Mr. Yash. Please unmute your line and go ahead.
Unidentified Participant
Hi. Thank you for the opportunity. Could you share your thoughts on market share trends across both TBR and PCs segments? Particularly across OEM and replacement channels?
Gaurav Kumar
Yes. As I mentioned earlier we don’t have exact market share. We believe we’ve gained market share in the TBR replacement category in the current year. MRF and US would be the two leading players in the TBR category overall numbers wise. We should.
Unidentified Participant
Yeah. And my second question on was on the channel inventory levels across category. How is that shaping up after like strong start to the year.
Gaurav Kumar
In. In India there’s. There’s no marked difference in terms of inventory levels at the dealers.
Unidentified Participant
Okay sir, thank you. That was very helpful.
Gaurav Kumar
Thank you Yash.
Unidentified Speaker
Thank you. We have the next question from Mr. Vijay. Please unmute your line.
Unidentified Participant
Just a follow up in the presentation. You have mentioned for the Europe that this the revenue decline is because of further operating income. I just wanted to understand what is that.
Gaurav Kumar
So Vijay, as I mentioned we in fact had a volume growth and given the raw material trend in Q4 there was a overall price mix. So the revenue decline from pure sales etc was 1%. The balance 2% which is contributing to the 3% overall decline is the other operating income we had received state aid from from Hungary stroke EU when we set up the plant. And, and we met all our commitments as of the end March 25. But as those assets move to India, the TBR assets, some of that other operating income which was being amortized and accrued because the benefit was over 10 years has to be moved out of Hungary.
And that’s why you see the drop vis a vis the similar quarter last year.
Unidentified Participant
Okay. And this, this will continue for the next three quarters as. As well, right?
Gaurav Kumar
Yeah. This will come down because the TBR assets are no longer in Hungary. It’s not a cash impact because the entire state aid has been received. It was to be amortized over a 10 year period and not just on receipt.
Unidentified Participant
Okay. Okay. Thank you and all. Thank you. Vijay.
Unidentified Speaker
Thank you. That was the last question. On behalf of Villar securities would like to thank the management. Thank you. And all the best.
Unidentified Participant
Thank you. Thank you. Thank you.