Archive · 4 Sep 2026
India’s Tyre Boom Highlights Three Uneven Stock Stories
India is buying more tyres because more vehicles are on the roads and people are buying larger cars, electric vehicles, and farm equipment.
Older trucks also need replacement tyres.
This has helped most large tyre companies grow quickly.
However, growing sales do not always mean growing profits.
CEAT improved its profits over several years but faced a sharp cost increase in its latest quarter.
Apollo Tyres improved its profits and reduced its debt.
TVS Srichakra grew the fastest recently, but it still needs to show that its better results can continue.
The article says CEAT and Apollo have stronger evidence of lasting improvement, while TVS Srichakra offers more potential but also greater uncertainty.
India’s ageing commercial-vehicle fleet, SUV and EV adoption, and rural spending are supporting tyre demand.
CEAT’s FY26 EBITDA margin improved to 13.2%, but Q1FY27 margin fell to 8.6% after higher costs and Camso integration expenses.
Apollo Tyres combined FY26 margin improvement with net debt-to-EBITDA falling to 0.4x from 3.2x in 2020.
TVS Srichakra’s Q1FY27 revenue rose 30.4% and net profit increased 161.5%, though its margin recovery remains incomplete.
Apollo traded at 13x trailing earnings, CEAT at 21.5x, and TVS Srichakra at 40.6x as of September 3, 2026.
- Who
- CEAT, Apollo Tyres, and TVS Srichakra, three listed Indian tyre makers.
- What
- The article compares their growth, margins, efficiency, balance sheets, valuations, and turnaround prospects.
- When
- The comparison uses FY25, FY26, Q1FY26, and Q1FY27 data; valuation figures are dated September 3, 2026.
- Where
- India, with Apollo Tyres also operating European facilities and TVS Srichakra having a US subsidiary.
- Why
- Strong tyre demand is creating an opportunity, but companies differ in how effectively they convert that demand into durable profits, lower debt, and cash generation.
Established Turnarounds
Higher-Growth, Unproven Recovery
Investment track record
Established Turnarounds
CEAT and Apollo Tyres have demonstrated multi-quarter improvement in their underlying economics, giving their turnaround cases greater credibility.
Higher-Growth, Unproven Recovery
TVS Srichakra has produced strong recent growth and early margin improvement but has not yet shown that the improvement is structural.
Valuation
Established Turnarounds
Apollo trades below its five-year median P/E, while CEAT is broadly near its historical valuation and the industry P/E.
Higher-Growth, Unproven Recovery
TVS Srichakra trades above its five-year median P/E, meaning its valuation reflects expectations of substantial future earnings improvement.
Key risks
Established Turnarounds
CEAT and Apollo still face raw-material cost pressure, although CEAT is pursuing price increases and Apollo is restructuring its European operations.
Higher-Growth, Unproven Recovery
TVS Srichakra faces customer concentration, a loss-making US subsidiary, capacity-expansion spending, and a need to restore margins to earlier levels.
- CEAT Q1FY27 revenue
- ₹4,318 crore, up 22.4% year over year.
- CEAT Q1FY27 EBITDA margin
- 8.6%, down from 10.9% a year earlier.
- Apollo net debt-to-EBITDA
- 0.4x in March 2026, compared with 0.7x a year earlier and 3.2x in 2020.
- TVS Srichakra Q1FY27 revenue
- ₹1,068 crore, up 30.4% year over year.
- TVS Srichakra Q1FY27 net profit
- ₹34 crore, up 161.5% year over year.
- Trailing P/E valuations
- CEAT: 21.5x; Apollo Tyres: 13.0x; TVS Srichakra: 40.6x.
- Planned TVS Srichakra investment
- ₹430 crore in capacity expansion across Uttarakhand and Madurai.