From near bankruptcy to $3 billion

Success isn’t always about greatness – it’s about consistency. Consistent hard work leads to success. Greatness will come. With these words, Onkar Kanwar opened his company’s 50th Annual General Meeting, singling out consistency as Apollo Tyres Ltd.’s mantra and a quality that in 2022 helped the tyre maker achieve annual revenues in excess of US$3 billion for the first time.

“As I look at this number, it reminds me of how and where we started this company – a nearly bankrupt company with one plant in Kerala, India which has blossomed to a $3 billion plus company with plants in India and Europe and presence in over 100 countries,” shared Kanwar. “We also saw a good performance for the financial year as we grew more than 17 per cent to close the year at Rs 24,568 crores (Rs 245.68 billion, £2.33 billion). I am glad to mention that revenues for the Indian Operations and European Operations’ revenue grew 18 per cent and 11 per cent respectively.

Returning to the Apollo’s mantra, Onkar Kanwar stated that the company’s “consistent above market performance” has helped it “increase our shareholders’ wealth,” with market capitalisation increasing 64 per cent in the last financial year. “Another area where our focus on consistency has given us rich dividends is in the quality function,” he added. “The company’s Chennai Plant, amongst the largest manufacturing facilities in Asia, was awarded the coveted Deming Prize, which is one of the highest awards for Total Quality Management.”

Onkar Kanwar’s speech in full:

Good afternoon ladies and gentlemen,

It gives me great pleasure to welcome you to the 50th Annual General Meeting of Apollo Tyres Ltd. The Directors’ Report and Audited Accounts for the financial year ended March 31, 2023, are with you. With your permission, I shall take them as read.

I would like to start the AGM with a quote; “Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come.”
And that has been our mantra – Consistency.

I firmly believe that once we chart a path, then success can only come by consistently following the path.

I had mentioned earlier that during the pandemic, we made minor course corrections as we started working with renewed vigour to further our relentless focus on cost reduction and enhancing manufacturing efficiencies across the organisation. Since then, we have continued our focus on keeping a sharp eye on Good Costs and Bad Costs. We have been consistently investing in good cost like R&D, marketing, brand, and people development while focusing on and reducing bad costs. Along with this, our vision for FY26, brought in a focus on Return on Capital Employed and clear targets for sustained profitability.

And you have seen the results of this consistent work. I am equally delighted that these steps have had a positive impact on our financial performance. I am immensely proud to mention that your company has crossed the $3 billion mark. As I look at this number, it reminds me of how and where we started this company – a nearly bankrupt company with one plant in Kerala, India which has blossomed to a $3 billion plus company with plants in India and Europe and presence in over 100 countries. We also saw a good performance for the financial year as we grew more than 17% to close the year at Rs 24,568 crores. I am glad to mention that revenues for the Indian Operations and European Operations’ revenue grew 18% and 11% respectively.

Importantly, our consistent above market performance has helped us to increase our shareholders’ wealth. If I look only at the last financial year, our market capitalisation has gone up by an impressive 64%.

Another area where our focus on consistency has given us rich dividends is in the quality function. The company’s Chennai Plant, amongst the largest manufacturing facilities in Asia, was awarded the coveted Deming Prize, which is one of the highest awards for Total Quality Management.

Last year, I had mentioned that we have set our agenda as we articulated our vision, purpose, and values. To make the vision a reality, I had mentioned about our growth pillars – Digitalisation, Tech and Innovation, Brand, Sustainability and People. The last two years have seen phenomenal work being done in each of these areas and you can read more about the progress made in the Annual Report.

While Apollo Tyres believes that it should be its financial performance which should do the talking for the company, we are humbled by the honours we receive by independent agencies – a testimony to the progress we are making. Recognising our work on the People front, we were certified as the ‘Top Employers’ in Singapore and UK and ‘Great Place to Work’ in India. Your company was featured in the ET Now’s ‘Finest Workplaces’ series. On Sustainability, our Chennai plant bagged the ‘Green Champion’ award and our manufacturing facilities in Perambra and Kalamassery in Kerala won the prestigious ‘SEEM National Energy Management Award’ in Industries and Facilities (Tyres) category. We received the ‘Good Design’ award in the Transportation category for our Vredestein products – Pinza HT and Pinza AT by Chicago Museum of Architecture and Design and the European Centre for Architecture Art Design and Urban Studies. On the Sustainability front, our scores in the S&P Global ESG have jumped and we are now in the top 18% of the companies, compared to being in the top 35% companies as of last year.

These are just a few accolades that we have received during the year even as we kept the foot on the consistency pedal.

Looking ahead, I see the uncertainties continue to pose a challenge, especially in Europe as we see no signs of any respite in the conflict there. Yet I remain bullish about the future of Apollo Tyres. In Europe, our strategy along with the best-in-class product mix have, time and again, helped us to gain market share. India is once again on a growth trajectory and your company will certainly benefit. I am equally excited about the work being done in the US market and I am confident that we will see good growth from this market.

We have built a strong foundation in the past years in each of our growth pillars. For example, on the Digitalisation front, we have a single data lake, which is underpinning all of our AI and ML initiatives. The data lake, Industry 4.0 technology and the newly set up Digital Innovation Centres will play a very key role in helping deliver our ambitious project of maximising our asset utilisation and minimal capex. We are already experiencing these new-age technologies and have seen an marked increase in the efficiencies of mixers. This in turn has helped us reduce energy consumption also.

We will continue to play on the theme on consistency and invest in our growth pillars. We will continue to work in line with our vision and ‘Drive Progress, Together, as we take all our stakeholders in the journey of enabling excellence – our purpose and reason why we exist.

I would like to conclude by thanking each one of you for having been a partner in this ongoing journey. The support that we continue to receive from our banks, financial institutions and the various state governments we operate in; as also national governments in various countries, enable us to plan and make our future.

Stay safe!

Thank you.

Onkar Kanwar