Apollo Tyres Q1 FY27 Results (NSE: APOLLOTYRE)
Signal: Margin pressure
The read
The trajectory is a revenue-growth recovery to +12.76% YoY and the fourth consecutive quarter of YoY operating-margin expansion in the prior series has ended: reported operating margin fell 150bps YoY to 11.73%, driven by gross-margin compression to 42.93% and a sharp Europe result decline to ₹151.77 million; PAT growth to ₹3,488.72 million is operationally less informative because of the ₹235.36 million exceptional gain and the ₹128.78 million year-ago base.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹7,397.79 Cr | +12.76% | +0.85% |
| EBIT | ₹53.56 Cr | N/A | |
| Net profit | ₹348.87 Cr | +2,609.85% | |
| EPS | ₹5.52 | +2,660.00% | |
| EBIT margin | 11.73% |
P&L walk
Revenue increased to ₹73,977.90 million, +12.76% YoY and +0.85% QoQ, but gross margin fell to 42.93% from 44.08% and operating margin declined to 11.73% from 13.23%; PAT of ₹3,488.72 million was boosted by the low year-ago base and a ₹235.36 million net exceptional gain.
Segments
APMEA remained the earnings engine with segment result of ₹4,824.25 million, +13.93% YoY, while Europe materially dragged the group as result fell 68.46% YoY to ₹151.77 million despite revenue growth of 10.30% YoY; consolidated PAT exceeded standalone PAT by ₹446.23 million.
Key positives
- Consolidated revenue reached ₹73,977.90 million, +12.76% YoY, accelerating from +3.6% in Q1FY26 and +11.8% in Q3FY26.
- APMEA segment result increased 13.93% YoY to ₹4,824.25 million and continues to provide the majority of segment profitability.
- Finance costs declined 9.06% YoY to ₹914.70 million and consolidated debt-equity improved to 0.16x from 0.19x.
- Depreciation rose 3.49% YoY while segment assets rose 8.50% YoY, producing a clean depreciation-to-asset-base check.
Key concerns
- Consolidated operating margin fell 150bps YoY to 11.73% and gross margin declined 115bps to 42.93%, despite revenue growth of 12.76%.
- Europe segment result dropped 68.46% YoY to ₹151.77 million, making the international earnings mix a material drag on the group.
- Standalone gross margin compressed 253bps YoY to 34.14%, a sharper deterioration than the consolidated result.
- PAT growth of 2,609.85% to ₹3,488.72 million is inflated by the ₹128.78 million year-ago base and does not represent equivalent operating growth.
Research and educational content only. Not investment advice.