Apollo Tyres Ltd

“India’s Largest Tyre Maker is constantly seeking change,

knowing full well that what is good for TODAY is not going to

hold sway TOMORROW”

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Apollo Tyres Limited

• Founded in 1976 • Headquartered at Gurgaun, Haryana• First plant in Perambra, Kerala in 1977• Has 4 plants in India,2 in South Africa,2 in

Zimbabwe,1in Netherlands• Acquired Dunlop Tyres International of South

Africa in 2006. • Today, is 15th largest tyre manufacturer in the

world. • Annual revenue of Rs 8.89billion; 59% revenue

from India, 28% from Europe,13% from Africa

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Vision And Values

Vision• To be a significant player in the global tyre

industry and a brand of choice, providing customer delight and continuously enhancing stakeholder value.

Core Values• Care for Customer• Respect for Associates • Excellence through Teamwork • Always Learning• Trust Mutually• Ethical Practices

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Industry Analysis• At present there are 40 listed companies in the tyre

sector in India. • Fragmented industry.(350 billion)• Major players are MRF, JK Tyres, Apollo Tyres & CEAT,

which account for 85 % of the organized tyre market. • The tyre industry is affected by :o Level of industrial activity, o Availability & cost of credit,o Transportation volumes & network of roads,o Execution of vehicle loading rules,o Radialization, o Retreading and exports,o Raw material price.

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Porter’s Five Forces

Entry Barriers: High Bargaining Power of the Suppliers: High Inter Firm Rivalry: Low Bargaining Power of the Buyers: High Threat of Substitutes: High

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Competitors AnalysisMarket cap Sales

turnoverNet profit Total assets

APOLLO TYRES

3,981.80 5,490.74 198.25 2,859.55

MRF 2,956.52 7,463.74 353.98

2,643.17

JK TYRES 411.83

4,831.22

61.32

1,553.60

CEAT 366.23

3,516.33 22.28

1,058.11

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• Early mover advantage, large capacity.

• Retreading segment• Capitalization of

European distribution network.

• Off highway tyre segment of India and Europe.

• New markets in Africa, tapping the potential of Dunlop brand.

• Potential markets in south America , Australia, Eastern Europe.

THREATS• Slowdown in Indian

economy(rising interest rates)

• Competition from global players(Michelin and Bridgestone)

• De-growth in truck cross ply segment

• Volatility in raw material prices

• Country and currency risks in Africa.

• Economic downturn in Europe

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OPPORTUNITIES

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Competitive Advantage• They manufacture best priced, best-produced and

best-designed quality tyres.• Raised the benchmark in design, production &

research.• Has a superlative stamp of customer satisfaction and

confidence because of its reliability and safety.• R&D is very efficient and good who have state-of-

the-art laboratory & design centre• It has come up with truck and passenger tyres that

consistently exceed customer expectations. Eg:One such recent example is the development of XT-

100K, a revolutionary cross ply tyre. It is designed to run beyond the 100,000 km mark giving it a 20% extra mileage.

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STRENGHTS

• Apollo Tyres' diversified market base across 3 continents which has enabled it to reduce its dependence.

• The presence of strong and established brands in the Company's portfolio.

• An extensive distribution network supporting Apollo Tyres' brands and products in all its 3 key operations.

• Continued Leadership position in the commercial vehicle tyre segment in India, including price Leadership in the cross ply segment.

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• A leading position in the fast-growing passenger car tyre segment in India, reaching the #1 position in production and #2 in market share.

• Strong player in the ultra high performance (UHP) passenger car tyre segment in Europe, particularly in high margin winter tyres.

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WEAKNESSES

Absence in the two-wheeler and three-wheeler tyre segment in India, which is large and continues to show good growth.

• Sub-optimal production facilities in terms of economic size in South Africa.

• Market dynamics and intense competition in some key markets do not allow passing on cost pressures as and when reasonably required.

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Strategies in Action

• Maintains a good review system• Internal auditing• Information system maintenance• Human resource management• Quality management

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FUTURE DIRECTION OF THE Co• Radial Tyre Penentration• Their European Operations are performing very

well giving a boost of 40% which has opened up sales avenue.

• Since they are absent in the Two wheeler and three wheeler segment in India they can focus more on this segment as it has high growth.

• They can also go in for Backward Integration as the raw materials cost is increasing overtime.

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• Investments in Research & Development which will help the company to be more sustainable in future and also help the company in the use of green materials and increased fuel efficiency from their tyres.

• Apollo Tyres Ltd is now planning to set up a full-fledged sales and service outfit in Jakarta, tentatively in the first quarter of the next fiscal

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• Early indications suggest that the company may roll out its Indonesian subsidiary to boost Indian exports in the archipelago. The Indian tyre major is also planning export of truck-bus radials to Australia.

• Apollo is primarily targeting the truck-bus and cross-ply OTR (off-the-road) tyres market in the South-East Asian nation. Indonesia — with large mining operations, cheap fuel and sustained economic growth at 6-7 per cent — offers wide opportunities for tyre makers.

 

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BALANCE SHEET      

Particulars 2010 2011 2012 2013 2014

Growth %

Net Worth 1,726.60 1,895.56 2062.25 2247.89 2450.2 9.8%Total Debt 1,132.97 1,907.97 3205.38 5385.04 9046.88 68.4%Total

Liabilities 2,859.57 3,803.53 5058.7 6728.07 8948.33 33.0%

Net Block 1,610.22 2,383.58 3527.7 5220.9 7726.9 48.0%Total

Assets 2,859.55 3,803.53 5058.7 6728.07 8948.33 33.0% 19

Profit & Loss Ac 2010 2011 2012 2013 2014 Growth %

Net Sales 5,045.99 5,480.92 5946.09 6457.45 7012.79 8.6%

Raw Materials 3,243.95 4,291.28 5664.49 7477.13 9869.81 32.0%

Power & Fuel Cost 163.47 179.02 196.03 214.65 235.04 9.5%

Other Manufactu

ring Expenses 78.42 89.37 101.8 115.95 132.07 13.9%

Interest 113.54 198.66 347.5 607.7 1062.9 75.0%

Depreciation 122.78 147.35 176.82 212.18 254.6 20.0%

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Thank You