Apollo Tyres margin falls as expenses outpace revenue growth
Consolidated net profit rose +13.27% YoY as a lower tax rate cushioned a 4.21-point operating-margin decline.
Filed 04 Nov 2026, 16:14 IST · after market close · Apollo Tyres Ltd (APOLLOTYRE)
Key takeaways
- Consolidated revenue grew +16.65% YoY, but expenses rose +22.42%, cutting operating margin by 4.21 percentage points.
- Net profit increased +13.27% YoY even as operating profit fell -16.2%, helped by a tax rate that was 6.94 percentage points lower.
- Operating margin fell for a third straight quarter to 10.73%, 1.18 percentage points below the 11.91% median of 223 reported sector peers.
Price around the results
Revenue growth did not cover the cost increase
Apollo Tyres reported consolidated revenue growth of +16.65% YoY, but expenses grew faster at +22.42%. That imbalance reduced operating profit by -16.2% and narrowed operating margin by 4.21 percentage points to 10.73%. Sequentially, revenue rose +7.71%, while expenses increased +8.93%, taking margin down another 1.0 percentage point.
Lower tax rate supported reported profit
Net profit rose +13.27% YoY despite the operating-profit decline, as the tax rate fell 6.94 percentage points to 26.22%. Interest expense also declined -6.74% YoY, while other income accounted for 3.96% of pre-tax profit, so it was not the main reason for the profit increase. Sequentially, the higher tax rate and lower other income contributed to a -16.22% decline in net profit.
Margin has declined for three consecutive quarters
Operating margin has fallen from 15.32% in Q3FY26 to 14.57%, 11.73% and now 10.73% over the following three quarters. Apollo Tyres was 1.18 percentage points below the 11.91% median operating margin among 223 Consumer Discretionary peers that had reported the same quarter.
Results were filed after market close
The results were filed after market close, so there is no post-result share-price reaction yet. Across the last eight result reactions, the stock rose three times and fell five times; the median absolute move was 1.82%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,968 cr | ₹7,398 cr | +7.71% | +16.65% |
| Other income | ₹16 cr | ₹82 cr | -80.86% | — |
| Expenses | ₹7,113 cr | ₹6,530 cr | +8.93% | +22.42% |
| Operating profit | ₹855 cr | ₹868 cr | -1.45% | -16.20% |
| Operating margin (%) | 10.73% | 11.73% | — | — |
| Interest | ₹94 cr | ₹91 cr | +3.03% | -6.74% |
| Depreciation | ₹381 cr | ₹391 cr | -2.59% | -0.73% |
| Profit before tax | ₹396 cr | ₹468 cr | -15.29% | +2.62% |
| Tax | ₹104 cr | ₹119 cr | -12.57% | -18.86% |
| Net profit | ₹292 cr | ₹349 cr | -16.22% | +13.27% |
| EPS (₹) | ₹4.62 | ₹5.52 | -16.30% | +13.51% |
Operating margin of 10.73% compares with a Consumer Discretionary sector median of 11.91% across 223 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 10.73% after three consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue, after +22.42% versus +16.65% YoY.
- Whether the tax rate remains below the 33.16% reported in Q2FY26.