Global Economy
The global economy demonstrated remarkable resilience for the Calendar Year (CY) 2023. The year was marked by significant events, including supply-chain disruptions, a conflict in Ukraine leading to a global energy and food crisis, increased uncertainties in the Middle East impacting the shipping lines in the Red Sea area and a substantial surge in inflation, prompting coordinated monetary policy tightening worldwide.
According to data from the International Monetary Fund (IMF), in CY23, Advanced Economies (the US, Euro Area, Japan, and more) further slowed down and grew by 1.6% as compared to 2.7% for CY22. The Euro Area was particularly impacted, with growth plummeting from 3.5% in CY22 to 0.4% in CY23, while the US economy saw a resurgence, posting a growth of 2.5% compared to 2.1% in CY22.
The traditional global growth engines, Emerging Markets and Developing Economies (EMDEs), collectively clocked a growth of 4.3% in CY23 as against a 4.5% growth in CY22. India and China led the growth, expanding by 7.8% and 5.2%, respectively.
Overall, the global economy witnessed a growth of 3.2% for CY23 as opposed to 3.4% for CY22.
Indian Economy
According to the second advance estimate by the Statistics Ministry in late February, Indias full-year GDP growth rate was revised upward to 7.6% from 7.3%. Additionally, the Ministry revised the GDP growth for 2022-23 to 7.0% from the earlier estimate of 7.2%.
The robust performance of the manufacturing and construction sectors fuelled Indias GDP growth with double-digit expansion in manufacturing and solid growth in construction. However, the agriculture sector contracted by 0.8% in the December quarter. This can be attributed to poor monsoon conditions and El Nino impact. Also, the country saw improved capital flows to bolster private investment.
One of the factors contributing to the stellar growth in the economy has been evolving consumer spending trends, particularly the growth of the middle-income demographic. Amid fluctuating post-pandemic spending growth, there has been a notable shift towards luxury and high-end products, outpacing demand for essentials. With rising disposable incomes expected among middle- to high-income households, this trend is poised to intensify, propelling overall private consumer expenditure growth.
Auto Segment
Amid a robust economic expansion of 7.6%, the Indian Automobile industry exhibited a commendable performance, witnessing a domestic industry growth of 12.5% during the last fiscal year. Data from the Society for Indian Automobile Manufacturers (SIAM) reveals that total vehicle sales, encompassing all categories, touched 23.8 million units, up from 21.2 million units in the previous fiscal year. The fiscal year saw passenger vehicle sales surge by 8.4%. This was primarily driven by the SUV category as preference for SUVs continued and the SUV segment registered a stellar growth of over 25% and today exceeds 50% of the total market. Of course, the growth paled in comparison to the remarkable increases seen in three-wheeler sales (0.7 million units), soaring by 41.5% and two-wheeler sales, rising by 13.3% to 17.8 million units.
One of the prominent trends observed in the two-wheeler category was the escalating demand for executive and premium-range vehicles, particularly those exceeding 110 cc and 150 cc. Additionally, the surge in sales of Electric two-wheelers, recording a remarkable 33.3% increase in the fiscal year, underscored the evolving preferences of consumers towards sustainable mobility solutions.
The Medium and Heavy Commercial Vehicle (CV) segment saw a good start of the year in H1; however, the latter half of the year saw a slowdown due to reasons such as a higher base effect, elections in five states and upcoming general elections in Q1 FY25. Two segments that bucked the trend, however, are passenger buses and prime movers.
The Light CV category continued to grow at a healthy clip of 4.3% CAGR, contributing to 70% of the CV industry. The Pick-up has been the fastest-growing segment within this category. Further, in the LCV, the Passenger segment (Buses) has seen significant growth, with public transportation back in full swing this year. Additionally, LCV Tippers have seen a tremendous spike, gaining popularity especially in locations with geographical constraints and narrow roads.
Overall, the CV segment saw a marginal 0.6% increase to 0.97 million units from 0.96 million units in FY23.
From an export perspective, it was not a good year, as the segment saw a decline of 5.5%. Passenger vehicle exports bucked this trend as it exports grew by 1.4%, while exports in the other segments - commercial vehicles, three-wheelers and two- wheelers - dropped by 16.3%, 17.9% and 5.3%, respectively.
Tyre Segment
The tyre industry plays a pivotal role in the automotive sector, particularly in the original equipment manufacturer (OEM) segment. Additionally, the replacement segments performance is closely tied to the overall economic activity within the country. According to data from the Automotive Tyre Manufacturers Association (ATMA), the industry witnessed a modest growth of 4% over a six-month period from April 2023 to September 2023. Notably, scooters and motorcycle tyre categories emerged as the frontrunners, boasting growth rates of 9% and 7%, respectively.
Despite the robust growth in the passenger car segment, there was a decline of (-3%) in the passenger car tyre category during the sixth- month period. Two significant factors contributed to the slowdown in the replacement market. Firstly, OEM sales experienced a significant decline from FY20 to FY22, with PCR sales dropping by approximately 18%.
This decline could be attributed to the initial impact of COVID-19 and subsequent chip shortages. Secondly, the lockdowns imposed due to COVID-19 led to reduced vehicle usage, resulting in longer replacement cycles and lower demand.
On the other hand, the commercial segment experienced significant traction, exhibiting a commendable growth rate of 5% with total sales reaching 16.65 million units. While overall exports faced a downturn of 6% for the period, the scooter and motorcycle tyre categories defied the trend, showcasing exceptional growth rates of 146% and 17%, respectively.
Europe Market Overview
Economy
The European economy faced significant challenges in Calendar Year 2023 (CY23). According to the European Commissions Winter Interim Forecast, the growth for both the EU and the Euro area was estimated at 0.5%, down from the 0.6% forecasted in the Autumn Forecast. Despite narrowly avoiding a technical recession in the latter half of the previous year, economic growth remained subdued throughout 2023.
The modest growth observed in CY23 can largely be attributed to the momentum generated by the post-pandemic economic recovery witnessed in the preceding years. However, this positive momentum began to falter towards the end of 2022, culminating in an abrupt halt to economic expansion. Throughout 2023, economic activity remained largely stagnant, amid challenges such as diminishing household purchasing power, dwindling external demand, rigorous monetary policies and the gradual withdrawal of fiscal support measures. Though the latter half of 2023 saw a sharp fall in energy prices, this led to a broad-based and faster-than-expected moderation of price pressures. In recent months, the region experienced inflation outcomes that were lower than anticipated, driven by a combination of factors including reduced energy commodity prices and a decline in economic momentum. These developments have propelled inflation on a more pronounced downward trajectory than initially anticipated.
Auto Segment
It was a good calendar year for the European automobile industry. In CY23, the EU car market experienced significant expansion, growing by 13.9% compared to the previous year, resulting in a total volume of 10.5 million units. The year saw double- digit gains in several markets, with notable increases in Italy (+18.9%), Spain (+16.7%) and France (+16.1%). Germanys performance was more modest, with a 7.3% year-on-year increase influenced by a weaker December performance.
Similarly, the commercial vehicle sector in the EU has witnessed several growth trends. New van sales surged by 14.6% to nearly 1.5 million units, driven by strong performances in key EU markets such as Italy,
Spain, Germany and France. New truck registrations also experienced substantial growth, increasing by 16.3% to 347 k units. Germany led the pack with significant sales and double-digit growth, followed by Spain, Italy and France. Additionally, new bus registrations grew by an impressive 19.4%, totalling 33 k units, with Italy and Spain leading the way in growth rates. Germany and France, the largest bus markets, also contributed to this positive trend with solid growth rates.
Tyre Segment
As the automotive sector experienced robust growth throughout the calendar year, the OEM segment of the tyre industry also saw good traction during the fiscal year under review. However, the replacement segment did not fare as well. According to data from the European Tyre and Rubber Manufacturers Association (ETRMA) for CY23, every product category witnessed a negative trend compared to CY22.
The replacement agricultural tyres segment was hit hardest, declining by 30%, followed by truck and bus tyres (-17%), motorcycle tyres (-11%) and consumer tyres (-8%).
The tyre replacement segment has been grappling with sluggish sales since June 2022, attributed to high inventory levels and two consecutive mild winters. This slowdown notably impacted passenger car tyres and Truck and Bus tyres (TBR) segments. Furthermore, the TBR and Off Highway Tyres (OHT) segments faced setbacks due to the economic downturn in Europe. Despite experiencing years of growth during and after the pandemic, the market began to decline significantly, primarily due to economic pressures on European agricultural activity, such as low selling prices for distribution and higher operating costs.
Despite these challenges, certain key trends persist in the tyre market. The All-Season tyre market continued to expand at double-digit rates, driven by new regulations like the Mountain Law in France. Additionally, the Ultra High Performance (UHP) and Ultra Ultra High Performance (UUHP) market for sizes 17/18 inches and 19 inches and above continue to witness significant growth overall.
Industry Structure and Developments
Following a robust commodity upcycle and global inflationary trends in FY23, commodity prices began moderating at the start of FY24. Throughout the year, there was an overall reduction of approximately 12% in raw material costs. During the first half of the year, raw material costs remained stable, but geopolitical instability, conflicts in the Middle East, the Red Sea crisis and sustained demand from the US amid modest Chinese demand growth led to a rise in commodities in the second half of the year. The year saw increased demands for crude oil and Brent crude oil by 5% year-on-year, despite strong commitments from most countries to reduce dependence on fossil fuels.
In 2023, there was some easing in inflation, although interest rates remained high, impacting global GDP growth rates.
Ocean freight rates in the European- Asian sectors notably increased in the latter part of the year due to the Red Sea crisis. Meanwhile, the availability of Natural Rubber faced a global shortfall, including in India, against the requirements of the consuming industry. Unfavourable weather conditions in major producing nations exacerbated the shortfall in the January-March quarter of FY24.
With rising international prices and the end of the peak production season in India, coupled with the export incentive of Rs 5/kg, Natural Rubber prices surged to Rs 185/kg in
March 24 from Rs 150/kg in Q3 FY24. Additionally, port restrictions on Natural Rubber imports continued in India, with imports only allowed at Nhava Sheva and Chennai ports. The inverted duty structure on natural rubber at 25% or Rs 30/kg, whichever is lower, persisted throughout the year, leading to a 23% rise in local Natural Rubber prices during FY24.
During the fiscal year, raw materials derived from crude oil, such as Carbon Black, Synthetic Rubber and Fabric, faced input cost inflation. In particular, Synthetic rubber prices surged in the last quarter due to a shortage of its main ingredient, Butadiene. This scarcity resulted from both planned and unplanned plant closures across Asia in Q4 FY24.
SWOT Analysis
Strengths
Apollo Tyres has the advantage of a diversified market base across geographies and therefore, it is not completely dependent on the Indian market alone. Further, the Company is working towards establishing and growing operations in other large markets, including North America.
With its reasonable presence in the two-wheeler segment, the Company is now a full-range tyre player in India and can service the large and growing two-wheeler tyre segments in India.
The Company is powered by two well-established product brands in its key markets - Apollo and Vredestein.
Apollo Tyres enjoys an extensive distribution network for its products across its two key markets.
In Europe, the Companys brand, Vredestein, has a heritage spanning over 100 years and an established presence. It also enjoys reasonable premium positioning.
The Company has state-of-the-art manufacturing facilities in India and Europe. With a robust network, it can easily distribute and sell its products across the globe.
The Company has entered the CV tyre segment in North America after a successful launch of its passenger vehicle range in this market.
In India, the Company is a leading brand in the CV and PV segments, which account for the bulk of the industrys revenue. The Company is best positioned to maintain its leadership position in the truck radial and PV segments and drive growth through the same.
Apollo Tyres has a global and culturally diversified management team driving growth across geographies.
The Companys research and development (R&D) facilities for PV and CV tyres will play a key role in bringing cutting-edge technology and innovation to drive growth.
Increased spend on building the corporate brand has made Apollo a stronger brand in India and a recognised one globally.
Apollo Tyres has long-established relationships with global OEM manufacturers, including those in India. It has further forayed into the premium OEM segments in India.
The Company is aggressively pursuing its strategy of building OEM relationships in Europe and has seen key wins.
The Company is taking a leadership position in the EV tyres segment. It was among the first in India to introduce an exclusive range of EV tyres, Amperion, that catered to the emerging EV segment and is an OEM fitment already. Also in Europe, it was the first Company to introduce an All-season tyre for the EV segment.
The Companys ranges, like Vredestein Wintrac Pro and Vredestein Quatrac Pro, have been given top ratings by multiple external media and tyre testing agencies.
Weaknesses
In a rapidly rising raw material cost scenario, the Company may be unable to pass on cost escalations to consumers in India in a timely fashion due to intense competition and various market dynamics, resulting in pressure on margins.
Opportunities
In India, the Company has a considerable lead over its competitors in terms of product brand equity in the truck bus radial segment. This implies impressive growth prospects with increasing radialisation.
Apollo Tyres has a leadership position in the passenger car tyres segment with healthy growth prospects.
In India, the Companys two-wheeler tyre product has been widely accepted by the market and there are prospects of scaling up the market share in a fast-growing and profitable segment.
The Companys highly automated state-of-the-art plants in India and Europe are scaling up and are well-positioned to drive growth in the European and Indian market due to their cost-competitive manufacturing facilities.
Apollo Tyres has started deliveries to European OEM manufacturers, endorsing the premium position of its Vredestein brand. This will help generate replacement demand.
With the premium positioning of the Vredestein brand in Europe and now with the modern state-of-the-art plant in Hungary, the Company has good prospects for improving its product mix towards a more premium car tyre segment.
The Company has brought the Vredestein brand to India and is catering to the premium segment of the market.
The Company continues to increase its focus on new geographies, such as North America and the Middle East, where it has already made some inroads. These regions will be the growth avenues for the future.
The Company has launched truck tyres in Europe and the US, which will further enhance revenue and market presence.
Threats
An economic downturn or slowdown in the key markets (India and Europe) can lead to reduced demand and capacity utilisation.
Persistent high inflation and raw material cost escalation will add pressure on margins.
A weak Indian currency can result in pressure on margins as the Company is a net importer.
Consolidation in the distribution landscape is likely as independent dealers are disappearing, wholesalers and company-owned networks are growing. The Internet is playing a major role in this change and this can impact the Companys network and profitability.
Segment-wise performance
The Company continued to focus on its key regions - India, Europe and North America.
During the year, the Company focused on strengthening its bottom line, improving its financial ratios and increasing its free cash flow. In FY24, the APMEA (Asia Pacific/Middle East/Africa) operation continued its focus on key themes for the Indian market, consolidating its leadership position and expanding market share by introducing new products across segments. Committed investments in brand building, R&D, expanding the network continued—ensuring a stronger, premium product portfolio to fuel the Companys journey of market leadership consolidation and profitable growth. The region has seen continued OEM approvals with high satisfaction as well as increased customer acknowledgements.
For other countries in the APMEA region, it continued increasing its presence with country-specific products, building brand salience and expanding distribution networks. The fiscal year saw the Company post a significant jump in the financial metrics—Operating margin, RoCE and Free Cashflow—in line with its focus.
Passenger Car Radial Tyres
In FY24, the Company bolstered its dominance in the Passenger Car Radial (PCR) tyres market, solidifying its position as a market leader.
Internal estimates suggest that the Company maintained its leadership in the replacement market for the fourth consecutive year.
The Company maintained its position as a leading brand in the PCR tyre industry, having an impressive market share in the replacement channel. Additionally, it stood out as the largest player in the OEM channel, serving all of Indias top 10 OEM brands. Noteworthy OEM fitments included popular SUV models like the Maruti Grand Vitara, Mahindra XUV 400 electric, Kia Seltos, Toyota Hyryder and Hyrcross. Among its recent additions was the Apollo Amperion, an exclusive EV-ready SUV tyre prominently featured on the newly launched Tata Punch EV, securing a majority fitment share.
This marked a significant milestone as one of the first EV-ready tyres from an Indian brand to be selected as an OEM fitment.
In the replacement channel, the strategic focus is on enhancing the premium sales mix, particularly within the SUV tyre range. Overall,
The Companys two-brand strategy was further bolstered by the expansion of the Vredestein tyre range, including the introduction of the Pinza SUV tyres. The addition complemented the existing offerings, which included the Ultrac Vorti i, Ultrac i and Pinza patterns, catering to various segments such as luxury sedans, premium hatchbacks and SUVs in the personal mobility space. The increasing preference for the brands among discerning consumers reflected the high-quality products offered, as evidenced by the expanding presence across the top 30 cities nationwide.
Commercial Vehicles tyres
The Companys Truck and Bus Radial (TBR) exhibited good growth and this was attributed to the successful introduction of new products like the Endurace RA and Endutrax MD+. Their partnership with Tata Motors to enhance fuel efficiency, as showcased through its Fuel Efficient Endurace nRG range, further contributed to this success. Additionally, notable OEM fitment stories, including those on EV buses, underscored their industry influence and strong partnerships.
In the Truck Bus Bias (TBB) segment, the Company revamped its mining range and introduced Terra BT.
The year saw the product garner significant attention from customers due to its superior performance and lower cost per kilometre impact.
Its dominance in the OE fitment in the LTR segment was further strengthened, particularly with its association with Mahindra & Mahindra for fitment on their new launch Bolero 2T pickup. The Company continued to focus on radialising the market through LTR and SCV segments while enhancing its Pickup products portfolio.
Within the Bias category, Vihaan continued to see significant acceptance within a year of its launch, experiencing exponential growth. The other product, BHIM, also demonstrated considerable growth, contributing to the overall bias story. To expand its portfolio and cater to the market trend of heavy loading in Pickups, it introduced the Vihaan Lug HD range, equipped with double dead technology.
Recognising the emerging trend of Fleetisation in LCV, the Company engaged with prominent fleet owners to enhance the value proposition, even as it introduced new radial sizes. It also ensured maximum visibility for our rising stars in the Bias segment, BHIM and Vihaan, through roadshows, celebratory films for the target audience and extensive digital promotions.
Off-highway Tyres
The Companys off-highway tyres (OHT) category is focused on three key sub-segments- Agriculture, Industrial and Earthmovers. In FY24, the Company leveraged its key strengths, which include a strong brand identity, a robust dealer network, a significant OE presence in the specialty segment and extensive rural penetration. These factors enabled the Company to maintain its competitive edge amid challenging market conditions.
In FY24, the Company experienced a resurgence in both the Tractor Rear and Front segments during H2, despite muted market demand conditions. While H1 saw degrowth, it saw solid growth in the second half of the fiscal year, even as it outperformed the industry. The first half saw the Company working on several factors, like higher price positioning, adjustments in network policies and the phasing out of certain products.
However, by the latter part of the year, it had successfully addressed these concerns while also introducing multiple new products in this category. Additionally, it saw increased contributions from its flagship product, VIRAT and the introduction of a new range, Krishak Gold X, to compete with Tier 2 brands. In the northern states of India, which account for around 50% of the industry, this strategy further bolstered its market position.
Industrial Tyres
The Company demonstrated stellar performance in the Industrial category, achieving double- digit growth in both the OE and aftermarket segments. This success was fuelled by a favourable macroeconomic environment and the introduction of new products tailored for Backhoe Loaders, Ports and Large OTR vehicles, which contributed to building significant momentum. Leveraging a specialised team with niche skills, it was able to effectively cater to the needs of its clients in the Industrial sector.
Two-wheelers
The Company continued with its premiumisation strategy in the two-wheeler segment. Both its brands - Apollo and Vredestein, continued to distinguish themselves by serving the premium segment of the market. The Apollo brands focus on the Steel Radial product portfolio and Vredesteins focus on the ultra-high-performance segment with the Centauro range, tailored for bikes exceeding 400 cc, helped the Company post stellar growth during the year.
The exceptional performance capabilities and superior quality of the Steel radial tyres saw the Company get OEM fitments in prestigious brands such as Triumph and Royal Enfield for both its brands.
Brand Building
Brand is a key pillar in the Companys vision and throughout the fiscal year, it remained steadfast in its commitment to investment in both its brands - Apollo and Vredestein and leveraged multiple channels to amplify its message.
The fiscal year also witnessed the Company leveraging its association with cricket legend Sachin Tendulkar as it launched the Apollo 10 campaign featuring Sachin Tendulkar focusing specifically on its SUV tyres. For passenger car tyres, it pioneered influencer marketing campaigns for tyre reviews, complementing traditional car reviews with detailed insights on tyre performance.
Furthermore, its key sports and community initiatives aimed to showcase the performance and key attributes of premium car tyres, particularly highlighting the all- terrain capabilities of Apterra Tyres to drive premiumisation. This was further leveraged as the Company launched its brand film featuring Sachin, which highlighted Apterras off-roading capabilities.
Additionally, it organised expeditions, drives and glamping tours to foster brand affinity among enthusiasts through its Bad Road Buddies initiative. As a global partner and sponsor of Manchester United, the Company focused on its asset utilisation on market initiatives like its United We Play campaign, a pan-India grassroots talent scouting programme in collaboration with Manchester United. This campaign similarly engaged directly with players whose parents own SUVs. Similarly, for the Vredestein brand, it ran a sustained advocacy programme throughout the year, including collaborations with Mashable on a series titled History On Wheel that specifically targeted premium audiences.
In the CV tyre segment, the fiscal year saw the Company organise a first-of-its-kind Commercial Vehicle Experiential Drive for the Endutraxx range, aimed at providing its large fleet owners with the opportunity to experience toughness, durability and more firsthand. The TBB segment saw the amplification of its key products, BHIM and Vihaan, through roadshows, celebratory films and extensive digital promotions.
In the OHT segment, it celebrated a significant milestone with the 15th Edition of the Apollo Tyres CV Awards, a prestigious partnership that has become the most sought-after recognition within the industry. These awards honour the top performers in the commercial vehicle sector, attracting key stakeholders ranging from manufacturers and top fleets to OE dealerships while serving as a testament to excellence in the field.
The sports and community initiatives continued to play a pivotal role in engaging the mid-high segment 2W community, emphasising performance and tyre attributes.
This has led to a preference for premiumisation, particularly with the Alpha and Tramplr series.
During the fiscal year, the Company orchestrated over 81 2W rides through Bad Road Buddies, engaging with enthusiasts. Additionally, the brand sponsored marathons in over five cities, highlighting the endurance of its tyres among urban youth. Through regular 360-degree campaigns, such as the Alpha Squad initiative and partnerships like Road to Old Trafford with Manchester United, the Company connected with the premium urban youth, who are owners of such 2Ws.
Europe
Over the past year, the Companys Europe operations have seen growth and achievements, driven by strategic expansion of its product portfolio, enabling it to foray into promising new markets even as it increased market share in its current markets. The fiscal year was no different as it continued to enhance its product portfolio in the passenger car tyres segments All Season, Winter &
Light Truck with the introduction of Quatrac, Wintrac and Comtrac 2, respectively.
Passenger Car Radial Tyres
Celebrating 30 years at the forefront of the All-Season Segment, Apollo Tyres revamped a key product and broadened its size range in the Ultra High Performance (UHP) and Ultra Ultra High Performance (UUHP) strategic segments. The launch of the All Season UUHP and UHP tyre, Quatrac Pro+, in July 2023, tailored for Sportscars, marked a significant milestone. Boasting superior wet road handling, enhanced snow performance, improved rolling resistance and an extensive range of 103 dimensions, this tyre reinforced Apollo Tyres leadership in the burgeoning All Season segment. Additionally, the introduction of the Quatrac Pro EV, the premier All Season tyre range designed for Electric Vehicles, further underscored its commitment to innovation.
The fiscal year also saw it unveil the new UUHP and UHP Summer ranges with the Ultrac Pro, a flagship product for the Vredestein brand. Furthermore, Apollo Tyres celebrated its 25-year collaboration with Italdesign, commemorating the debut of the Vredestein Sportrac in 1999.
Off-highway Tyres
In the OHT segment, the newly developed Vredestein VF Flotation Optimall received top ratings from the independent German test institute DLG, setting new benchmarks in trailer tyres with its outstanding soil pressure performance.
In the TBR segment, Apollo Tyres expanded its range of popular EnduRace RT2 truck trailer tyres, offering superior all-weather performance, rolling resistance, mileage and durability. The EnduRace RT2s advanced tread pattern ensures uniform wear, reduced rolling resistance, noise and whole-life costs. Moreover, the tyre provides outstanding grip in wet and winter conditions and is certified for snow grip with the three-peak mountain snowflake mark.
Brand Building
To bolster the visibility and recognition of the Vredestein brand across Europe and beyond, Apollo Tyres invested in communication and sponsorship initiatives. It has secured a new agreement, naming Vredestein as the Official Main Sponsor of the FIS Alpine World Ski Championships 2025 in Saalbach, Austria. This builds on its successful partnership from the 2023 event in Courchevel and Meribel, France, aimed at elevating brand awareness and highlighting Vredesteins acclaimed winter and all-season tyres. The FIS Alpine World Ski Championships is a biennial event renowned globally for alpine ski racing and attracts top athletes from over 75 nations. With a combined viewership of over 500 million tuning in globally, the sponsorship aims to significantly enhance the brand recognition of Vredestein. Moreover, its presence extends through partnerships with the Alpine Ski World Cup, reaching audiences across various European countries.
Continuing its commitment to brand promotion, Apollo Tyres maintained its sponsorships with Mille Miglia and Manchester United, along with new initiatives to expand Vredesteins communication footprint in Southwest Europe. It initiated TV campaigns in France in Autumn and was the official naming partner of Vredestein 20km de Paris, a prominent race in Europe. Local sponsorships with the German Golf Association and DVTK sports club in GYO are also ongoing.
The Companys engagement extends to local sponsorships (German Golf Association in Germany and DVTK Sports Club in Hungary), classic car rallies in Germany and Austria, including the Ennstal Classic and the Int. Vredestein Pannonia-Carnuntum Historic Oldtimer.
The year also saw the Company sign a new two-year lead sponsorship deal with SL Trucksport 30 for its Apollo Tyres brand. The new team, named SL Apollo Tyres Trucksport, competed in the 2023 season with a brand- new MAN TGS 2022 truck, featuring Apollo Tyres branding and purple colouring. Sascha Lenz, driving for SL Apollo Tyres Trucksport, secured third place in the 2023 Goodyear FIA ETRC and was honoured with the prestigious Drivers Driver Award for his outstanding performance throughout the season.
The year was marked by significant events, including Product Experience and Customer Intimacy events leveraging Mille Miglia sponsorship and the introduction of the Vredestein Ultrac Pro in Sevilla, featuring its brand ambassador Giancarlo Fisichella, a former Formula One driver and Official Test Driver for Ferrari. The Companys product launches were amplified through iconic 3D screens in Piccadilly, London and across Europe, ensuring maximum visibility and impact for the Companys latest innovations.
OE Journey
In its continuing strategy of engaging with OEMs, the fiscal year saw wins in this journey. The Company was selected as the original equipment supplier for several prestigious automotive models. This included the all-new BMW Serie 2 Active Tourer, the all-new BMW X1 sports utility vehicle and the new Caddy from Volkswagen Commercial Vehicles. Additionally, Audi has opted for its latest Vredestein Ultrac and Sportrac summer tyres as original equipment for the Audi A1 Sportback.
In the OHT segment, its Vredestein VF Traxion Optimall was chosen as original equipment by leading agricultural manufacturer AGCO for its new range of Fendt tractors.
Furthermore, the fiscal year marked a significant milestone for Apollo Tyres in the TBR segment as it entered into its first OE agreement in this sector with IVECO, a prominent commercial vehicle manufacturer in Europe.
Under this promising partnership, it is supplying its impressive range of EnduTrax tyres for the way truck range, aligning with its medium-term strategy in Europe.
The fiscal year also saw the Company launch multiple products across segments. It introduced the second generation of its EnduRace RA 2 truck tyre, featuring a revamped tread design and upgraded materials to enhance all-season grip, handling and durability while reducing rolling resistance. It expanded its range of EnduRace RT2 truck trailer tyres, catering to a broader range of transport needs.
It added six new sizes to its premium Vredestein Traxion Optimall VF range, extending compatibility to tractors with 160 hp and above.
The year saw the launch of the eagerly awaited EnduMile LHT, the Companys inaugural Long-Haul Trailer tyre. The Company closed the year with the announcement of the launch of the Vredestein Ultrac Pro ultra-ultra-high-performance (UUHP) summer tyre, featuring an innovative lightweight design for optimal performance, comfort and environmental sustainability.
Americas
The Company has taken a significant step forward by introducing the Vredestein brand into the Canadian market. The expansion introduced the Hypertrac in partnership with Canadian Tire, one of the largest retailers in the country, with a renowned range of high-performance tyres for Canadian consumers. The launch included a fully integrated brand-building campaign featuring out-of-home takeovers of Yonge- Dundas Square, one of the busiest intersections in Canada, with over 100,000 people crossing the square daily. Also, the Company launched its Apollo brand in the commercial segment at the prestigious TMC (Technology & Maintenance Council) event held in New Orleans. Marking its official entry into the largest fleet-market customer segment in the United States. Given the confidence in its products, the Company was the only one in the industry to offer a complimentary road hazard warranty on all commercial vehicle tyres. In addition to this industry-leading practice, it offered rapid nationwide delivery, domestic inventory and a 72-month workmanship and material warranty.
The fiscal year also saw the Companys Vredestein brand partner with the top-rated Petersen Automotive Museum, home to one of the largest automobile collections in the world. It partnered with the automotive museum to commemorate the 100th anniversary of the Hollywood Sign, one of the most popular landmarks in the world, by fitting some of the most iconic cars, the rolling legends of Peterson Automotive Museum, with its Vredestein tyres.
Outlook
The economic outlook for FY25 continues to be one of uncertainty as the Russian-Ukraine and Middle East conflict shows no sign of resolution and hence chances of economic disruptions will still be prevalent.
According to estimates by the IMF, the world economy is forecast to maintain a 3.2% growth rate in both 2024 and 2025, similar to 2023. While advanced economies may accelerate slightly, from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025, emerging market and developing economies might experience a modest slowdown, from 4.3% in 2023 to 4.2% in both 2024 and 2025. In terms of inflation, a steady decline is expected, with global inflation decreasing from 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025.
The Euro Area is anticipated to see a significant growth uptick, doubling from 0.4% to 0.8%.
Indias economy is poised to expand by 6.8% in the current fiscal year, with public investment serving as the primary driver of this growth.
Amid such uncertain economic and geopolitical conditions,
Apollo Tyres has adopted a prudent fiscal approach. The focus continues to be on investing in good costs, cutting down bad costs, ensuring employee safety and conserving cash.
The Company will focus on sustainable profitable growth as it aims to achieve its Vision targets by FY26, especially on the metrics of Profitability, RoCE and Balance Sheet leveraging.
Risks and Concerns
The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities. The Company recognises that these risks need to be managed effectively and mitigated to protect the interests of shareholders and stakeholders, achieve business objectives and create sustainable value and growth.
The Companys Risk Management processes focus on ensuring that these risks are identified promptly; and a mitigation action plan is identified and monitored periodically to ensure that the risks are addressed accordingly. The Companys Risk Management framework operates with the following objectives:
Proactively identify and highlight risks to the right stakeholders;
Facilitate discussions around risk prioritisation and mitigation;
Provide a framework to assess risk capacity and appetite; develop systems to warn when the appetite is being breached.
The list of key risks and opportunities identified by the Management includes the following:
FINANCIALS
Weaker international markets and an economic downturn
The economic condition in the international markets continues to be under pressure, which could impact overseas operations and exports from India.
Demand in the tyre industry is dependent on economic growth and/or infrastructure development. Any slowdown in economic growth across region impacts the industry.
Supply chain risks
In a globally interconnected world, supply chain resilience is crucial. The global economic situation, ongoing Russia- Ukraine war and the Red Sea crisis, cyber-attack, political and economic instability in the Suppliers country and more can disrupt the supply chain and increase transportation costs.
Cyber Attacks
Cyberattacks are on the rise and ransomware and phishing scams are now a common occurrence. The cyber-attack threat of unauthorised access and disruption of business operations continues to increase across the globe.
Raw material price volatility
The industry is raw material- intensive. Natural rubber, which is a major raw material, is an agricultural commodity and is subject to price volatility and production concerns.
Most other raw materials are affected by the movement in crude prices. Rising crude oil prices increase raw material costs and may affect the profitability of the Company.
Both natural rubber and crude prices depend on the external environment and are, therefore, beyond the reasonable control of the management.
Competition
Continuing intense competition from both global and domestic players creates continuous pressure to create winning products and retain market share.
Rapidly Changing Market Trends and Regulatory Environment
Market trends driven by sustainability and adoption of electric vehicles and the regulatory and legislative landscape continue to change. The Company must continue to keep pace with changing market trends and regulatory obligations and implement strategies to remain compliant and relevant.
SOCIAL
Manpower and Labour
Retaining skilled personnel may become increasingly difficult across the globe with the increasing demand for talent.
Tyre manufacturing is significantly dependent on the availability of skilled labour. Any labour unrest, shortage of labour, or diversion of labour to other industries may impact tyre production.
Internal controls and systems
The Company believes that internal control is one of the key pillars of governance, which provides freedom to the management to operate within a framework of appropriate checks and balances. Apollo Tyres has a robust internal control framework, which has been instituted considering the nature, size and complexity of its operations and risks in the business. The framework comprises, inter alia, a well-defined organisational structure, roles and responsibilities, documented policies and procedures, a Financial Delegation of Authority, ERP controls, a Code of Conduct and so on. IT policies and processes also ensure that they mitigate current business risks. These policies are complemented by a management information and monitoring system that ensures compliance with internal processes as well as with applicable laws and regulations.
The Companys internal control environment ensures efficient conduct of operations, security of assets, prevention and detection of frauds/ errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information. The Company uses SAP as its core Enterprise Resource Planning (ERP) software. The ERP controls are regularly evaluated and systems and processes are continuously improved by adopting best-in-class processes and automation and implementing the latest IT tools. The Company has a strong culture of internal controls, such that the operating management is not only responsible for revenue and profitability, but also for maintaining financial and commercial discipline within an internal control framework.
The Company has a well-established, independent and in-house Internal Audit function that is responsible for providing assurance on compliance with operating systems, internal policies and legal requirements, as well as suggesting improvements to systems and processes. The Internal Audit function monitors and evaluates the efficacy and adequacy of internal control systems in the Company and reports on operational deficiencies and key process risks to management and the Audit Committee. The Company has also identified and documented key internal financial controls for critical processes across all plants, warehouses and offices wherein financial transactions are undertaken. The financial controls are evaluated for operating effectiveness through managements ongoing monitoring and review process and independently by Internal Audit.
The Head of Internal Audit reports functionally to the Audit Committee and administratively to the Chairman and Managing Director of the Company. Key internal audit findings are presented to the Audit Committee at its quarterly meetings.
Most importantly, the senior management sets the tone at the top for no tolerance for non-compliance and promotes a culture of continuous innovation and improvement. Management supports independent and objective internal auditing and the implementation of internal audit recommendations.
Sustainability
Apollo Tyres identified Sustainability as one of the five key pillars of its Vision 2026. The Company has developed a Sustainability Management Framework that further defines its environmental, social and governance (ESG) aspects in line with the United Nations Sustainable Development Goals (UNSDGs). To achieve Sustainability across the operations and entire value chain, it has developed a Sustainability Governance Model aligned with the global standard ISO 26000.
The Company has adopted and invested in ESG principles to ensure long-term sustainability and to be net zero by 2050. Its 15-point model under ESG helps in measuring performance with a focus on material issues and monitoring progress on various aspects, like emission reduction, improving water efficiency, harnessing diversity and inclusion and assessing of human rights. In FY24, the Company has made a commitment to undertake an Absolute emissions- based target aligned with the Science Based Targets initiative.
Currently, the Companys commitments in the ESG space are given below:
1. Reducing Scope 1 emission intensity by 25% in
FY26 compared to the baseline year of FY20.
2. Reducing Scope 2 emission intensity by 35% in
FY26 compared to the baseline year of FY20.
3. Sourcing 30% of total power usage from renewable sources by FY26.
4. Improving water withdrawal intensity by 25% in
FY26 compared to the baseline year of FY19.
5. Use of 40% renewable/ recycled input materials in all its product by 2030.
6. Committed to improve Diversity Equity and Inclusion (DE&I) by 12% globally by FY26
7. Target to reach over 15 million beneficiaries by FY26 through our core programmes.
Environment
The environment is a key stakeholder for the Company. Apollo Tyres has been working on evaluating its energy use, water consumption, natural resource conservation, greenhouse gas emissions, management of toxic waste and compliance with environmental regulations.
Emission Reduction
The Company has articulated its decarbonisation strategy for a sustainable future as it is working to decrease its emissions in Scopes 1, 2 and 3.
The Company is working with the World Business Council under its Global Platform for Natural Rubber project, focusing on three vital themes: supply chain, operations and products and services, all in alignment with the Sustainable Development Goals (SDGs).
Scope 1 -
The Company is reducing its use of fossil fuels. Its plant in Andhra Pradesh has been using 100% biofuel since FY23 in its manufacturing process, even as its other plants are exploring the use of alternate fuels. The Company is implementing various energy- saving projects year after year for the reduction of Scope 1 emissions and exploring clean energy sources that hold promise in the future for tyre manufacturers to generate the steam required for the high- temperature, high-pressure stages of the vulcanisation process.
Scope 2 -
The manufacturing plants at Chennai and Limda in India and Gyongyoshalasz in Hungary, respectively, have invested in renewable energy projects, leading to the achievement of 25.5% of Renewable electricity in total electricity for FY24. This initiative has enhanced reliance on renewable electricity and enabled the Company to lower its Scope 2 emissions.
Scope 3 -
In Europe, the Company is building a sustainable new warehouse and distribution centre to enhance operational efficiency and environmental sustainability based on eco-friendly design principles. Further, in India, it has collaborated with the World Economic Forum and Niti Aayog for the zero-emission road freight cluster in Gujarat to reduce value chain emissions by adopting e-vehicles for its value chain.
In addition to monitoring its emissions, the Company has engaged with its global supply chain to onboard them to focus on sustainability by conducting workshops. The supplier partners are also expected to include their Sustainability rating and performance under water efficiency and product design. To augment this work, the Company has renewed its certification under ISO 20400 - A Sustainable Procurement Framework.
Governance
The Company has adopted ISO 26000:2010, an internationally recognised framework on Social Responsibility, to shape its Sustainability Governance Model. Under the guidance of the Sustainability Steering Committee, comprising the leadership team and reporting directly to the Board, the Company has infused its sustainability initiatives with the necessary gravity and diligence.
Further, the sustainability roadmap for FY26 is developed based on the six pillars of the Sustainability Framework: Sustainability Governance, Climate Change, Circular Economy, Value Chain, People and Community Development. The pillars have cross-functional working groups that collaborate to achieve the targets under each pillar.
The Company participated in various ESG rating platforms, such as CDP, S&P Global and Sustainalytics. Over the years, the improvement in ratings is a testament to the organisations efforts to drive sustainability.
CDP Rating for Climate Change and Water Security - From FY22, the Company has improved the score and continued to sustain it till the last submission in FY23, where Apollo Tyres scored B, which is in the Management band.
The Company submitted the response under the CDP Water Security Assessment for the first time in FY23 and attained a score of B-, which is higher than the global average of C under the CDP Water Security Assessment 2023.
S&P Global - Apollo Tyres ESG score has improved from 39/100 last year to 44/100 this year.
Sustainalytics - In the latest assessment of FY24, the Company scored 13, improving from 18.1 in FY23, on their ESG risk scale for the low-risk group.
Social
Apollo Tyres recognises that stakeholders are an essential part of business operations. The prerogative is to understand their concerns and involve them in managing risks to ensure the sustainability of the business. The entire process is guided by a Stakeholder Engagement Policy approved by the Board.
Apollo Tyres has identified and prioritised its key stakeholder groups: employees, customers, supply chain partners, communities, NGOs, Government/corporate partners, investors and more.
Diversity, Equity and Inclusion (DE&I)
The fiscal year saw some significant achievements in the DE&I endeavours of the Company.
A total of 54 transgender peer volunteers from 20 locations reached out to 21,000+ beneficiaries during the financial year. As part of its commitment to improve DE&I by 12% globally, the Company onboarded women employees in the field sales team as well as at the manufacturing facility across diverse functions.
The year also saw the Company initiate an awareness session on Human Rights, which highlighted the importance of Human Rights implementation and disclosure.
Under the peer-led outreach initiative, it engaged with the LGBTQI+ community across 20 locations in 14 states.
Communities
The Company continued to focus on CSR activities around four key thematic areas: Healthcare for Trucking Community, Solid Waste Management and Sanitation, Livelihood for Rural Women and Biodiversity Conservation.
In FY24, the Company has reached to over 1.4 million beneficiaries through its CSR initiatives. Nearly 10 million beneficiaries have been reached since 2013.
Healthcare
The Company continued to provide its Healthcare services to its key stakeholder, the trucking community, across 33 centres across 19 states in India.
In the fiscal year, over 1.2 million beneficiaries were outreached through healthcare services.
Apollo Tyres supports the Government of Indias commitment to eliminate TB in India by 2025 through its dedicated healthcare programme for the trucking community. The Company has partnered with USAID, the Union and Central TB Division and the Ministry of Health and Family Welfare for the TB initiative. During this year, the Company organised two focused campaigns for World Lung Day and World TB Day for a TB-free India for its trucking community. The total coverage for both campaigns has been 50,000+ for World Lung Day and 75,000+ for World TB Day, respectively.
Solid Waste Management and Sanitation
The Company continued its efforts to provide waste management services in the villages around its manufacturing locations and around the Delhi transhipment hub. A total of 1,07,150 beneficiaries benefited from SPARSH initiatives in FY23.
In this financial year, the Company has constructed 110 toilets and declared one village Open Defecation Free (ODF), adding to the 6 ODF villages in the Tamil Nadu region.
Livelihood for Rural Women - Navya Project
The programme design of Navya is in alignment with the Sustainable Development Goals (SDGs), enabling access to microfinance and improving the livelihood of rural women by creating Self-Help Groups (SHGs).
Under the initiative, the Company brings women together through the Village Development Community (VDC), enabling them to share ideas, solve problems and support one another on their entrepreneurial journeys.
In the reporting period, the livelihood programme has benefited 1702 women; 2224 women received training in income generation; and 1318 women were linked with income generation activities; and 3,607 women were linked with government schemes and availed of benefits worth Rs 7.4 crore.
Biodiversity
At Apollo Tyres, biological diversity has taken centre stage as a global initiative with our commitment to reach out to nearly half a million beneficiaries by FY26 for biodiversity conservation.
In this financial year, the Company formed collaborations and initiated a strategic partnership with the Indian Business and Biodiversity Initiative to mainstream sustainable management of biodiversity. Under It.org, as part of the World Economic Forum, the Company pledged to conserve and plant 1.05 million trees.
As part of the Global commitment to biodiversity, the Company has planted 2,000 saplings for Mangrove Conservation in Kannur, Kerala. Furthering the efforts towards amplifying the importance of biodiversity and mangrove conversation, the Company organised an inter-state Environment and Nature Quiz for 60 colleges from six states.
Under the afforestation project, the Company monitored the 3.5 lakh planted trees in the Tamil Nadu region and the 10,000 trees under the Miyawaki project in the Gujarat region.
Under Local initiatives, the Company has conducted activities towards
Climate Change Mitigation and Watershed Management across the manufacturing locations in India.
In this financial year, the Company continues to maintain five ponds in various locations with the help of local communities.
Europe
In Europe, at the Hungary plant, the Company has been organising a bottle cap collection and the entire proceeds from the bottle caps sale are donated to the Egyutt Gyogyulni Konnyebb Foundation. Regarding employee engagement, through the Shoebox campaign every year in November, children in need receive toys and gifts in Shoe boxes donated through Babtista Charity Service. This year, the employees at the Hungary Plant took part in several initiatives, like blood donation camps, tyre donations to local ambulances and TeSZedd, the largest volunteer waste collection event.
This year, Germany also saw some actions under employee engagement where employees participated in the B2Run Koblenz, which is one of the most popular corporate running events in Germany, that recently took place around the Deutsches Eck in Koblenz.
In the Netherlands, at Enschede, under ACE-ing it for Voedselbank (Foodbank), 150 employees from R&D and 550 employees from the Plant gave four hours of volunteer time each on sending out communication and sorting crates, etc. This year, 13 crates of non-perishable food items were donated to underprivileged communities.
Similarly, under ACE-ing it for Speelgoedbank (Toy bank), 20 employees from Amsterdam and six from Enschede gave four hours of volunteer time each on sending out communication, sorting the toys and more.
Apollo Vredestein took the initiative to promote exercise and personal development for children and young people at Vredestein Manchester United Soccer School. With exclusive coaching sessions and in collaboration with a key youth charity in each country, the Company is helping children realise their potential both socially and academically.
Marking the celebration of World Environment Day on June 5, 2023, the employees from Amsterdam gave their volunteer time to plastic fishing with the objective of #BeatPlasticPollution to save Amsterdam Canals.
Information technology
D Digitalisation remains one of the key growth pillars for Apollo Tyres. During the fiscal year, it took strides in this journey by modernising IT infrastructure across the globe, with a focus on cloud computing. It has partnered with Amazon Web Services and now has 85% of its data and computing on the cloud.
During FY24, the key value creation focus for digitalisation has been driving greater customer experience to underpin its sales growth objectives; build an agile and globally integrated supply chain; advance Industry 4.0 technology to drive increased manufacturing efficiency and support internal efficiency gains by standardising and automating internal processes.
The Companys usage of new digital technology has enabled it to offer new and exciting ways of doing business, as shown by its new service offering, Avolve, offering tyres as a service along with other value-added digital solutions to commercial fleets.
The Company has connected and is streaming data from all its key production machines and processes on a real-time basis. This extensive data is being used to identify areas of production inefficiency and help address them. In PCR, it has achieved ~ 5% efficiency gain production. This is one of the underpinnings enabling the increase in RoCE.
To support increased manufacturing complexity and continue to target more efficiency growth using data, the Company has been rolling out a manufacturing execution system (AMES) with high levels of automation and data capture across all its plants and operations. AMES is a truly cloud-based MES system that provides greater scalability, high availability and responsiveness than traditional MES systems available today on the market.
The Company has also been working on the development and deployment of a common Digital Maintenance platform as a global tool in all manufacturing plants. This has helped to save costs on spares as well as build a strong foundation to advance predictive maintenance, which will help further drive manufacturing efficiency.
During the year, it successfully implemented SAP to support the growth of the US business. With a focus on creating a single integrated supply chain, it has been digitising end-to-end supply chain planning and execution. It is now using AI technology to improve sales forecasting. This has helped the Company to improve its forecast accuracy in India, resulting in an improvement in product availability while also helping reduce inventory.
As the cyber threat landscape continues to evolve, it has continued to increase investment in new-age tools for strengthening the security of the network perimeter and identity security, along with strengthening the cyber security culture and awareness across the organisation.
The Company has partnered with Palo Alto Networks and implemented a cloud-based zero-trust network architecture (ZTNA) tool called Global Protect, which enabled the Company to apply secure access no matter where their users, workloads, devices, or applications are located.
It enabled safe browsing, secure access to corporate apps and secure access to SaaS applications, along with the implementation of one Global Security Policy, thus enhancing employee experiences of working from anywhere with enhanced security.
Continuing the partnership with CrowdStrike, FY24 saw the Company implement two new tools for identity protection and continuous vulnerability management to ensure the fight against new-age identity attacks. It has also strengthened active directory security and prioritised fixing vulnerabilities that could be exploited in the environment.
It has also continued to strengthen the workforce and culture for cyber security and completed 4000 hours of awareness campaigns, which included role-based cyber training in plants/ R&D/Sales, Security Awareness Proficiency Assessment phishing simulations, awards and recognitions as well as cyber awareness month celebrations.
This significant investment in cybersecurity has enabled the Company to secure the TiSAX certification for its key manufacturing locations.
The Company also continued to invest in the IT infrastructure to ensure secure access to systems and data as well as achieve 99.95%+ application and system availability. Apollo Tyres
is now a cloud computing-enabled tyre manufacturer.
Health, safety and environment (HSE)
The fiscal year saw progress towards the Companys Health and Safety mission, with visible improvement in two pillars - Systems and Processes; and Mindset and Behaviours.
To have focused governance and ensure compliance of established Layers of Defence as per the Apollo Safe Way, functional score card audits were conducted across the plants in India. During FY24, the audit score saw a two-fold improvement.
Furthermore, all manufacturing units are certified according to the ISO 45001:2018 Occupational H&S Management System, highlighting the Companys commitment to achieving the highest level of compliance with H&S.
Lost Time Incident Frequency Rate (LTIFR) reported for FY24 was 0.38 as opposed to 0.58 for FY23, a reduction of approximately 36%.
This has been recorded due to dedicated efforts to create trainings on topics, like workplace safety, hazard identification and risk assessment, Safety Absolute, emergency preparedness and so on. The Companys HSE Engagement Index helps its workforce report unsafe conditions, unsafe actions, safety interactions and near- miss reporting.
One of the employees has been awarded the Rajya Shram Bhushan Award via a scheme introduced by the Director of Industrial Safety and Health (Government of Gujarat) for his outstanding contribution to make the workplace safer.
During the fiscal year, the Company introduced AI-based camera solutions to minimise risks in high-risk operations of Material Handling Equipment and other manufacturing operations.
Development in human resources and industrial relations
THE PEOPLE PILLAR
Apollo Tyres believes that its people are the driving force behind its success. The knowledge, skills and experience of Apolloites Enable Excellence and, in that, Drive Progress Together, because it contributes directly to the productivity, innovation and overall performance of the Company.
Human Capital at Apollo
The Companys core values set it apart. Apolloites are strongly driven by the global values that are integral to the Companys DNA. Leading with these values, Apolloites go beyond being employees and colleagues but also friends and business partnersOne Family.
The Company has been one of the leaders in the tyre manufacturing market and has managed to attract talent in the industry in the past few years. However, with a fast-moving and competitive business landscape, a strong employee value proposition is what sets it apart to attract and retain talent.
For the 11th year in a row, Apollo Tyres has been certified as a #GreatPlaceToWork by the Great
Place to Work? Institute (India). Trust is the main ingredient in building a Great Place to Work. It establishes a positive work environment and facilitates collaboration and teamwork among employees.
Certified as a Great Place to Work 2024 in India, Apolloites are more likely to feel comfortable sharing ideas, taking risks and collaborating on projects, branding Apollo as a healthy and successful organisation.
The Top Employers Institute is the global authority on recognising excellence in peoples practices.
To be eligible for the certification, the Company must have advanced HR practices and at least 2,500 employees globally. The Top Employers Institute programme certifies organisations based on the participation and results of their HR Best Practices Survey via a very stringent process and qualifiers.
The survey covers six HR domains consisting of 20 topics, including People Strategy, Work Environment, Talent Acquisition, Learning, Diversity, Equity and Inclusion, Well-being and more, via a strenuous process of data submission and audits. The Company has been certified as a Top Employer across its Singapore, Hungary, Netherlands and UK offices for 2024.
The certification as a Top Employer showcases its dedication to a better world of work and exhibits this through excellent HR policies and people practices.
Diversity, equity and inclusion
Diversity, equity and inclusion (DEI) are crucial for an organisations success. It brings together a wider range of perspectives and experiences, fostering creativity and innovation. This leads to better problem-solving, stronger decision-making and a more engaged workforce. The Company is home to a multi-cultural, multi-generational (balanced representation of Gen X, Gen Y and Gen Z) and gender diverse workforce. It is committed to DEI as an important goal in the People Pillar and is committed to its global target of 12% by FY26 for gender diversity.
During the fiscal year, the Company launched multiple initiatives to encourage the inclusion of diverse perspectives in the organisation.
The Apollo Global Ideathon helped capture transformative ideas to help the Company anticipate and solve future challenges. Another initiative - Internal Inspirations - showcased the various journeys of Apolloites globally, acknowledging theirjourney of ups and downs - all to encourage Apolloites to be rid of their fear of failure, continue to take necessary risks and eventually pave the way for success at the individual, team and organisational level.
Talent Management
The Company prioritises its internal talent, believing in putting people first. Its talent management framework ensures Apolloites have opportunities to learn, develop and grow across roles and geographies. The internal career portal facilitates internal mobility and the annual APEX (Apollo People Excellence) exercise, tied closely to our Apollo Leadership Competency Framework, identifies and develops employees based on performance and potential, building a strong talent bench for future leadership roles.
Through its flagship Apollo Laureate Leadership Development programme, Apollo Tyres cultivates emerging leaders, equipping them with essential leadership competencies to drive positive business outcomes. Since its inception in 2022, the programme has seen over 350 Laureates graduate globally.
The Company organised local and regional leadership development initiatives tailored to various leader levels and aligned with regional priorities. For instance, in the APMEA region, programmes such as the ExCom Leadership Journey, Executive Coaching for HODs and Leadership Jumpstart contribute to leadership development. Notably, the Apollo Young Turks programme, in collaboration with the Indian Institute of Management - Bangalore (IIMB), targeted the next generation of dealers in Apollo Tyres supply chain.
The fiscal year witnessed the conclusion of the one-year High
Impact Excellence Programme in Europe, graduating a new cohort of future leaders. Additionally, the LEAP programme equipped R&D middle managers with essential leadership skills for future roles within the R&D function.
The year also saw Apollo Tyres honoured as one of Indias Top Leadership Factories by the Great Managers Institute, in collaboration with the National Human Resources Development and Economic Times. This prestigious acknowledgment underscores the effectiveness of its leadership development initiatives, particularly the programmes under its Apollo Laureate umbrella. It reflects the Companys commitment to investing in its people, further reinforcing the ethos of One Family.
While maintaining a people-first approach that prioritises internal talent mobility, Apollo Tyres continued to incorporate fresh perspectives into the Company to remain relevant and ahead of the market curve.
A significant initiative in the fiscal year involved partnering with INSEAD to recruit graduating management associates from the Class of 2023. Following a rigorous selection process spanning two months, the Company welcomed five Global Management Associates (GMAs) who bring their unique experiences to live projects across various functions, guided by assigned mentors. Similarly, the Apollo Summer Internship programme provides a platform for students from leading management institutes to gain hands-on experience through live projects in collaboration with the leadership team. This year, six interns graduated from the programme, while a fresh cohort of 12 students from institutes like IIM, IIFT, NITIE, NMIMS, MICA, DMS IIT and IRMA embarked on their internship journey, contributing to functions such as sales, marketing, supply chain management and finance.
In Europe, Apollo Tyres remained proactive in sourcing fresh talent by actively participating in prestigious job fairs and forging partnerships with local universities in the Netherlands and Hungary. These efforts have enabled the teams to engage with prospective employees, students and business partners, highlighting the dynamic projects and growth opportunities available at the Company.
By combining robust internal talent development initiatives with the infusion of new talent, Apollo Tyres continues to enrich the diversity of its workforce across multiple generations. Leveraging this unique strength of ours, we hope to go the distance and push Apollo to greater heights!
Engagement
In prioritising active employee feedback as a cornerstone of its positive workplace culture, Apollo Tyres regularly reaches out to its employees. The Companys Apollo Voice employee engagement survey continued to gather valuable insights, supporting informed decisions on culture, benefits and work processes.
Last years survey achieved a remarkable global participation rate of 92%, underscoring its commitment to open communication and continuous improvement. Its efforts have resulted in consistent enhancements in key areas such as Alignment to Apollo Objectives, One Apollo spirit, Pride for Apollo and understanding of its Vision, Purpose and Values.
The Company saw a Sustainable Engagement score of 87, meaning 87% of Apolloites have given a favourable response to the various key engagement parameters.
In terms of other benchmarks, its Sustainable Engagement score remained higher than that of the Auto sector at 86.
In response to survey feedback,
Apollo introduced the Apollo Recognition Hub, a unified global platform for celebrating employee achievements and signalling progress in the Rewards and Recognitions area. Similarly, efforts to foster a learning organisation yielded positive results, with the L&D score climbing significantly in 2024.
One Family
Across the globe, the Company saw celebrations and events to foster work-life balance and camaraderie, strengthening the One Apollo Family bond. Recent onsite events included Family Day, Diwali, Pongal and Christmas celebrations, bringing Apolloites and their families together. Personal achievements and accolades were also celebrated through congratulatory notes in the internal newsletter, Whats New.
Apollos European team recently participated in the #Vredestein Les 20KM de Paris marathon, with over 60 members representing Apollo Tyres across the region. This event provided a unique opportunity for colleagues to meet, interact and run together, embodying the One Family value. In New Delhi, the 9th edition of the Apollo Tyres New Delhi Marathon saw a massive turnout of over 20,000 runners, including Apollo One Family members across various categories. Additionally, the Apollo Cricket League brought together employees from India-based offices, fostering teamwork and sportsmanship beyond the confines of work.
Learning and Development
Apollo Tyres maintains a steadfast commitment to fostering a learning organisation. This entails nurturing an innovative mindset among employees and providing opportunities for continuous growth and skill development. Through initiatives like the Apollo Virtual Academy, with an emphasis on internal partnerships with subject matter experts, it continued to empower its workforce and ensure their personal and professional advancement.
The fiscal year saw the Company achieve an increase in learning engagement, surpassing industry benchmarks. It outperformed its industry peers across various Percipio matrixes, such as the rate of returning learners to the learning platform, average content access per learner, course application rate and so on.
Awards such as the Learning Technologies Awards (Gold) 2023 for Percipio and the Brandon Hall Global Excellence Awards (Bronze) for Apollo LXP are testimonies to the impactful learning programmes.
During the year, the Company launched the Apollo Capability Academy, a new learning initiative that leveraged internal subject matter experts to integrate learning into employees daily workflows. Further, collaborations with Digital IT and Finance teams led to the successful delivery of the Apollo Digital Acumen and Apollo Financial Acumen programmes, benefiting over 1,800 employees worldwide. Regionally, smaller capability academies were introduced to enhance cross- functional familiarity. For instance, Europe conducted the Marketing for Non-marketers programme.
New joiners continued to be onboarded comprehensively through an induction programme covering the Companys history, values, products and management. Additionally, the Know Your Apollo series was launched to deepen understanding of key functions, facilitating live webinars for interactive learning before being archived on Percipio, the global learning platform.
Rewards and Recognition
The Company adopts a comprehensive approach to employee compensation, encompassing monetary and non-monetary rewards like benefits, work-life balance, recognition and career development opportunities. This strategy aids in talent attraction, retention and motivation by offering a well-rounded rewards package.
Performance-based pay is a cornerstone of our compensation model, incentivising top performers and promoting continuous improvement. Its rewards framework emphasises both extrinsic (for instance, material rewards) and intrinsic values (e.g., career growth opportunities), fostering job satisfaction and a positive workplace culture.
Global recognition initiatives centred on performance (Roll of Honour and Chairmans Employee of the Year), long service (Apollo Pillars), appreciation (Recognition Badges) and celebration (Chairmans Recognition Week) saw employee contributions and milestones being highlighted across the organisation. FY24 marked the launch of the Apollo Recognition Hub, facilitating seamless recognition and rewards experiences and has seen over
13,000 appreciation badges being exchanged and more than 2,500 Apolloites recognised. The platforms convenience and accessibility aim to enhance morale and cultivate a positive work environment. Further, the annual Chairmans Recognition Week introduced monetised awards for quick redemption through the platform. New regional recognition included the #GoTheDistance awards in Europe, recognising teamwork and cross-functional excellence.
Well-being
Employee engagement remained a vital aspect of workplace wellbeing, fostering a positive environment through open communication and shared purpose. The fiscal year saw the Company prioritise holistic wellbeing through the Apollo Well- Being Programme. Events as part of the programme included International Womens Day and a curated calendar of events to support physical, mental, social and financial health.
The Employee Assistance Programme expanded to offer comprehensive support in the physical and mental well-being space. Further, the Company partnered with various organisations, like Practo in India for medical consultations and Intellect in Singapore for mental health resources. Social engagement initiatives like the Aayush fitness programme and monthly fitness activities promote an active lifestyle, strengthening camaraderie among Apolloites.
Industrial relations
Industrial relations remained cordial during the fiscal year. Regular interactions were conducted with all stakeholders, including management, employee representatives and trade union leaders, improving productivity, cost-reduction and the working environment of the manufacturing facilities. Various forums enabled effective resolution of employee grievances and queries. In-house training programmes were conducted to facilitate overall safety and health at the workplace. Many employee welfare and engagement initiatives were rolled out during the fiscal year across all manufacturing locations and offices. These initiatives helped the Company maintain conducive relations in all its operations.
Discussion on financial performance with respect to operational performance
The financial statements have been prepared in accordance with the requirement of the Companies Act, 2013, and applicable accounting standards issued by the Institute of Chartered Accountants of India. The management of Apollo Tyres Ltd accepts the integrity and objectivity of these financial statements as well as the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements are reflected in a true and fair manner and also reasonably present the Companys state of affairs and profit for the year.
(Rs Million)
| Year Ended Year Ended | ||||
| Particulars | March 31, 2024 | March 31, 2023 | March 31, 2024 | March 31, 2023 |
| Standalone Consolidated | ||||
| 1 Revenue from operations | ||||
| Sale of Products | 172,351.84 | 168,899.09 | 250,199.92 | 241,223.24 |
| Sale of Services | - | - | 3.69 | - |
| Other operating income | 3,041.46 | 4,111.10 | 3,573.54 | 4,458.06 |
| Total (1) | 175,393.30 | 173,010.19 | 253,777.15 | 245,681.30 |
| 2 Expenses | ||||
| a) Cost of materials consumed | 95,208.29 | 106,937.72 | 110,559.02 | 122,619.59 |
| b) Purchase of stock in trade | 9,473.71 | 9,628.17 | 23,763.03 | 26,782.74 |
| c) Changes in inventories of finished goods, stock- in-trade and work-in-progress | 229.41 | 455.54 | 2,309.04 | (3,031.77) |
| d) Employee benefits expense | 11,087.15 | 10,259.15 | 29,640.01 | 26,199.21 |
| e) Other expenses | 28,428.65 | 24,620.42 | 43,032.60 | 39,975.00 |
| Total(2) | 144,427.21 | 151,901.00 | 209,303.70 | 212,544.77 |
| 3 Operating profit (EBITDA excluding other income) (1 - 2) | 30,966.09 | 21,109.19 | 44,473.45 | 33,136.53 |
| 4 Other income | 1,357.97 | 751.26 | 1,535.73 | 410.92 |
| 5 Less: Finance costs | 4,034.92 | 4,672.28 | 5,059.41 | 5,312.35 |
| 6 Less: Depreciation & amortization expenses | 9,165.04 | 9,070.50 | 14,778.30 | 14,191.42 |
| 7 Profit before share of profit/ (loss) in associate / joint venture, exceptional items & tax | 19,124.10 | 8,117.67 | 26,171.47 | 14,043.68 |
| 8 Share of profit / (loss) in associates / joint venture | 0.00 | 0.00 | 3.61 | 2.42 |
| 9 Exceptional items | (757.93) | 0.00 | (773.04) | 225.77 |
| 10 Profit before tax | 18,366.17 | 8,117.67 | 25,402.04 | 14,271.87 |
| 11 Less: Provision for tax | ||||
| Current tax | 3,079.20 | 1,477.15 | 4,208.79 | 2,506.93 |
| Deferred tax | 3,746.72 | 1,441.06 | 3,974.59 | 1,306.50 |
| Total | 6,825.92
11,540.25 |
2,918.21
5,199.46 |
8,183.38
17,218.66 |
3,813.43
10,458.44 |
| 12 Profit after tax |
KEY FINANCIAL RATIOS
In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios. Please note that there is no significant change of 25% or more in Key Ratios viz. Debtors Turnover, Inventory Turnover, Current Ratio as compared to the previous year other than the following:
| Sl. No. Particulars | FY24 | FY23 | % Change | Explanation |
| 1 Interest Coverage Ratio (in times) | 6.57 | 3.99 | 64.56% | Lower interest cost and better profitability |
| 2 Debt equity ratio (in times) | 0.30 | 0.42 | (28.20%) | Due to repayment of existing debts during the year |
| 3 Operating profit margin (in %) | 17.66% | 12.20% | 44.70% | Lower expenses led to increase in operating profit margin. |
| 4 Net profit margin (in %) | 6.58% | 3.01% | 118.94% | Lower expenses led to increase in net profit margin. |
CHANGE IN RETURN ON NET WORTH
| Sl. No. Particulars | FY24 | FY23 | % Change |
| 1 Return on Net Worth* | 11.52% | 5.51% | 109.00% |
* Reason for change- Higher profitability led to increase in return on net worth.
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