Business

Demand has begun improving: Apollo Tyres

Demand for truck tyres from original equipment manufacturers has improved in the second half of this fiscal, according to Gaurav Kumar, CFO, Apollo Tyres Ltd.

“We are witnessing a steady improvement in demand momentum,” Mr. Kumar said. “The truck tyres’ original equipment manufacturer (OEM) demand, which was lagging, is showing promising signs of improvement. Though, the passenger car OEM demand continues to suffer due to shortage of semiconductors,” he said in an analyst call.

Going forward, demand momentum for the second half seems to be better, and further price increases have been announced for November to counter the raw material cost push, he added.

“While our margins have been impacted in the last couple of quarters in the Indian operations, we continue to target the mid-teens EBITDA margins, in line with our vision on a medium-term basis,” Mr. Kumar said.

He said ATL continued to focus on cash flow in terms of a ‘tight working capital management and capital expenditure’.

“We are looking at a very good demand momentum for Q3 and continuing with the strong operating performance,” he added.

Neeraj Kanwar, vice chairman and MD said costs inflation could continue to weigh on operating performance in the near-term.

“We remain focused on medium- to long-term targets, and would reiterate that we are committed to use every possible opportunity to engage as a leaner and a more efficient organisation with focus on technology and digitalisation,” said Mr. Kanwar.

He said the company was also focusing on developing a global approach with focus on ‘premium partners such as BMW and Daimler’. “All of these, along with consistent R&D efforts, podium positions and new product launches should help us further improve our pricing position and contribute to our FY26 targets.”

On ATL’s exposure to international markets, Mr. Kanwar said it helped the company not only to diversify, but also derisk its businesses.


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Printable version | Jan 22, 2022 3:12:31 PM | https://www.thehindu.com/business/demand-has-begun-improving-apollo-tyres/article37549032.ece

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