Apollo Tyres to Invest Rs 5,810 Cr in Andhra Pradesh Expansion

Apollo Tyres today confirmed a Rs 5,810 crore investment plan to expand its manufacturing capacity in Andhra Pradesh as demand for vehicle tyres climbs sharply.

The company claimed that the investment will be financed by both internal cash and debt to increase the production in major segments by FY 2029. This announcement is accompanied by good quarterly performance that will prepare the ground of good future growth.

The growth will increase passenger car radial (PCR) tyre capacity by 52 percent - an increase of approximately 3.7 million tyres per annum - and truck and bus radial (TBR) capacity by 82 percent, or approximately 1.3 million tyres per annum. Apollo Tyres already operates its Andhra Pradesh plant at maximum capacity and approximately 82 percent of PCR and 89 percent of TBR capacity are utilized, which highlights the timeliness of the given move.

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Company officials asserted that the investment will be in line with projected demand growth in both segments, which will be fuelled by good sales of vehicles in India and the rest of the world. Apollo Tyres in its stock exchange filing said it had a positive outlook on the short and medium-term prospects of tyre demand which indicated a strategic bet over the expansion of manufacturing prowess in one of its main hubs in India.

The capacity expansion announcement came with strong third-quarter financial performance, with consolidated net profit increasing by approximately 40 percent to 741 crore and revenue increasing by 12 percent to 7,743 crore against the same quarter a year ago. Chairman Onkar Kanwar also emphasized on double-digit volume growth across markets with India recording its best quarterly performance ever based on replacement, export and OEM sales.

The Rs 5810 cr investment does not only increase the manufacturing presence of Apollo Tyres in Andhra Pradesh, but it is also an indication of optimism in the continued demand of tyres into the end of the decade.