Key Points from the discussion:

For Q2FY16, domestic business remained muted, as it registered 4% volume growth, which was equally offset by lower pricing.

European operations in Q2FY16 declined 19.3% YoY, mainly impacted by a subdued demand environment (volumes de growth of 9% and price de-growth of 2%) and was impacted by an unfavourable currency movement (9%) during the quarter.

In constant currency terms, revenue from Europe declined around12% YoY to €120 million.

On the standalone basis; replacement, OEM, export mix stand at 33%, 27%, 40%, respectively. Further, truck & bus accounts for 66% of total standalone revenue (33% each bias & radial).

On a consolidated basis, revenue mix in terms of replacement and OEM continues to be at 75:25, respectively.

Overall utilisation levels have further improved to 75% during the quarter, with radial capacity utilisation running at more than 90%.

For the period between April-October 2015, on an average, the company has reduced

prices of Truck Bus bias (TBB) and PV tyres by 8% and 4%, respectively.

In H1FY16, TBR volumes for the company recorded volume growth of 20% YoY, supporting overall growth.

At present, the company enjoys a market share of 25% in TBR segment & is likely to

improve radial volumes.

During Q2FY16, in the European business, the company had a maintenance shutdown resulting in a lower utilisation level resulting into higher overhead cost. Also, a delayed winter with higher inventory level at the dealer end is resulting in lower offtake for the company.

According to the management, the domestic tyre industry continues to face growth challenges and has been adversely impacted by cheaper imported Chinese tyres in the domestic market.

Chinese imports are up 90% YoY in Q2FY16.

Chinese tyres currently have ~30% market share in the domestic TBR replacement segment.

Chinese TBR tyres are at ~30% discount to Indian TBR tyres. This eventually leads to prices of Chinese TBR tyres being almost at par with Indian truck bus bias tyres.

The restructuring exercise of its South African business is complete. The company had an exceptional item of Rs 47.7 crore during the quarter, mainly towards the gain from the sale of property of its wholly owned subsidiary Apollo Tyres Africa.

The company is also looking at exploring the 2-W segment and wishes to enter the space, going forward.

On a consolidated basis, its gross debt has reduced from Rs 1100 crore in Q4FY15 to Rs 800 crore in Q1FY16. The company is debt free at the net debt levels.

The company has planned a greenfield plant in Hungary worth ~€500 million over the next four or five years. The plant will have a capacity to produce 5.5 million passenger car and light truck tyres and 675,000 M&HCV tyres per annum. This facility would complement the existing facility in Netherlands.

By 2020, management is planning to take overseas revenue contribution from current 35% to 40%.

The company is setting up new plant in Thailand and expanding capacity of Chennai plant.