Key Highlights:

• Apollo Tyres to invest 5810 crore in Andhra Pradesh plant expansion

• PCR capacity to rise by 52 percent and TBR capacity by 82 percent by FY2029

• Current utilisation at 82 percent for PCR and 89 percent for TBR

• Capex to be funded through internal accruals and debt

• Strong Q3 FY26 profit growth supports expansion plan

• Industry expected to grow 6 to 8 percent in FY26 driven by infrastructure and replacement demand

Apollo Tyres Announces Large Capacity Expansion In Andhra Pradesh

Apollo Tyres has announced a major capital expenditure plan of 5810 crore to expand its manufacturing facility in Andhra Pradesh. The project will be completed in phases and is expected to be fully operational by FY2029.

This is not a routine expansion. It is a strategic step taken at a time when existing capacity is running close to its limits and demand across passenger and commercial vehicle segments is showing steady improvement.

Focus On PCR And TBR Capacity At A Single Location

The entire expansion will take place at the Andhra Pradesh facility, which has become one of the company’s most important production hubs.

• Passenger Car Radial capacity will increase by 52 percent, adding 3.7 million tyres per year

• Truck And Bus Radial capacity will increase by 82 percent, adding 1.3 million tyres per year

The sharper focus on TBR tyres is important. Demand for these tyres is closely linked to freight movement, infrastructure activity, and replacement demand from commercial vehicles.

By expanding both segments at the same location, Apollo Tyres can improve logistics efficiency, reduce costs, and better manage its supply chain.

High Capacity Utilisation Triggered The Expansion

One of the main reasons for this investment is the very high utilisation at existing plants:

• PCR utilisation at 82 percent

• TBR utilisation at 89 percent

Such levels leave very little room to handle extra demand. If capacity is not added in time, companies risk delivery delays, supply shortages, and pressure on margins.

Since tyre plants take years to build and stabilise, this decision appears proactive. Apollo Tyres is preparing today for demand that it expects to see over the next three to four years.

Strong Financial Performance Supports The Capex

The expansion plan follows a strong Q3 FY26 performance where the company reported a 39.6 percent year on year rise in net profit to 470.5 crore.

The project will be funded through a mix of internal accruals and debt. This shows management confidence that operating cash flows will remain strong enough to support the investment without putting pressure on the balance sheet.

Industry Growth And Demand Tailwinds

The timing of this expansion also matches industry expectations. The Indian tyre industry is expected to grow 6 to 8 percent in FY26.

Key demand drivers include:

• Higher infrastructure spending

• Increase in road construction activity

• Strong replacement demand

• Steady recovery in commercial vehicle movement

• Passenger vehicle sales and replacement cycles

Although raw material costs remain a challenge for tyre makers, higher production volumes help in spreading fixed costs and improving cost efficiency.

Strengthening Competitive Position By FY2029

As new capacity comes on stream by FY2029, Apollo Tyres will be in a stronger position to:

• Meet rising demand without supply issues

• Protect its market share against domestic and global competitors

• Improve service levels to dealers and OEM customers

The long project timeline means the real impact will be seen over the next few years. However, the announcement itself signals management’s confidence in long term demand in both PCR and TBR segments.

A Sign Of A Broader Manufacturing Trend

This move reflects a wider trend seen across Indian manufacturing sectors. Companies are now moving from growth driven by higher utilisation to growth supported by fresh capacity creation.

Apollo Tyres’ 5810 crore investment is a clear example of this shift, where companies are preparing for sustained demand rather than short term cyclical recovery.