Apollo Tyres to slash capex by Rs 400 cr in FY21
The company has also taken a cut in the capex investment across its European operations
Apollo Tyres has decided to slash its capital expenditure (capex) by Rs 400 crore in FY21 amid challenging business environment due to COVID-19.
Given the overall demand situation, Apollo Tyres has decided to cut back on capex in 2020-21 to make sure that the company is not stressed from a cash flow or a liquidity perspective.
The company had earlier earmarked a capex of around Rs 1,400-1,500 crore for domestic operations for FY21.
The company has also taken a cut in the capex investment across its European operations.
With uncertain scenario due to rising COVID-19 cases, the company has taken various steps to control cost as much as possible.
The company is likely to have a sales decline in FY21 compared to FY20, because its original equipment (OE) business is still looking weak. Barring passenger car tyre segment, on all other product segments such as truck tyres, farm tyres, two-wheeler tyres, the company is seeing good recovery in the replacement segment.
All the company plants in India have started operations under the state government guidelines. They are running at lower levels of utilisation and as expected will be gradually ramping up.
Both of the company’s plants in Europe are operating and going up in capacity utilisation in Hungary and Netherlands.