Apollo Tyres' Q4 profit jumped on a tax credit as sequential operations weakened
Revenue grew 14.20% year on year, but operating margin fell 0.75 percentage points sequentially and the tax rate turned sharply negative.
Filed 14 May 2026, 16:16 IST · after market close · Apollo Tyres Ltd (APOLLOTYRE)
Key takeaways
- Consolidated operating profit rose 27.64% year on year as revenue grew 14.20% and operating margin widened 1.53 percentage points.
- A tax credit of Rs 469.32 cr lifted net profit 241.77% year on year despite pre-tax profit falling 37.80%.
- The stock fell 7.47% by the fifth session after results, well beyond its 1.67% median move after the past eight results.
Price around the results
Year-on-year operating improvement, sequential slowdown
Consolidated revenue grew 14.20% year on year, while operating profit rose 27.64%, showing operating leverage as expenses grew 12.18%. Sequentially, revenue fell 5.26% and operating profit declined 9.88%, so the quarter lost momentum after Q3FY26. The company’s operating margin was 0.24 percentage points below the 14.81% median of 93 Consumer Discretionary peers that had reported.
Margin dipped as costs fell slower than revenue
Sequential expenses declined 4.43%, less than the 5.26% fall in revenue, which narrowed operating margin by 0.75 percentage points to 14.57%. Interest expense fell 10.31%, partly offsetting a 2.95% rise in depreciation. Year on year, the faster 14.20% revenue growth than expense growth supported a 1.53 percentage-point margin expansion.
Tax credit drove reported profit, not pre-tax earnings
Pre-tax profit fell 77.65% sequentially and 37.80% year on year, while other income was negative at Rs 420.66 cr and represented -260.23% of pre-tax profit. The tax rate was -290.33%, compared with 34.93% in Q3FY26 and 28.96% a year earlier, reflecting a tax credit of Rs 469.32 cr. That accounting benefit lifted net profit 34.10% sequentially and 241.77% year on year.
The margin recovery ended after three consecutive gains
Operating margin improved from 13.04% in Q4FY25 to 13.23% in Q1FY26, 14.94% in Q2FY26 and 15.32% in Q3FY26 before falling to 14.57% in Q4FY26. The latest quarter therefore ended a three-quarter run of sequential margin gains. The stock fell 1.82% on the result-day session and 7.47% by the fifth session, a larger decline than the 1.67% median absolute move across its past eight result reactions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,336 cr | ₹7,743 cr | -5.26% | +14.20% |
| Other income | ₹-421 cr | ₹23 cr | — | -362.16% |
| Expenses | ₹6,267 cr | ₹6,557 cr | -4.43% | +12.18% |
| Operating profit | ₹1,069 cr | ₹1,186 cr | -9.88% | +27.64% |
| Operating margin (%) | 14.57% | 15.32% | — | — |
| Interest | ₹90 cr | ₹100 cr | -10.31% | -17.94% |
| Depreciation | ₹397 cr | ₹385 cr | +2.95% | +5.21% |
| Profit before tax | ₹162 cr | ₹723 cr | -77.65% | -37.80% |
| Tax | ₹-469 cr | ₹253 cr | — | — |
| Net profit | ₹631 cr | ₹471 cr | +34.10% | +241.77% |
| EPS (₹) | ₹9.97 | ₹7.43 | +34.19% | +242.61% |
Operating margin of 14.57% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.82% | -1.62% |
| Next session | -6.63% | — |
| 5 sessions | -7.47% | -7.59% |
| 15 sessions | -4.22% | — |
| 30 sessions | +7.07% | — |
Volume on the results session was 8.45× its 20-day average.
What to watch
- Whether operating margin holds above 14.57% after the sequential decline.
- Whether pre-tax profit recovers from Rs 161.65 cr without relying on a tax rate of -290.33%.
- Whether other income remains below zero after the Rs 420.66 cr negative contribution.