OEM recovery, robust replacement demand to boost Apollo Tyres revenues

Price hikes to offset some of the the surge in raw material costs

The cyclical recovery in commercial vehicles, strong demand in the replacement segment, and ramp-up of its Hungarian facility are expected to help improve the revenue growth trend for Apollo Tyres. A strong presence in the aftermarket segment should enable it to hike prices and maintain margins.

Analysts at Nirmal Bang Research expect the tyre industry to post healthy growth rates over FY21-FY23, led by 18-20 per cent growth in the original equipment manufacturer segment over this period. Within this, an incremental trigger for the Apollo Tyres stock is the revival in the medium and heavy commercial vehicle (M&HCV) segment, which accounts