Treading Firmly

How the Kanwars of Apollo Tyres built India’s most global tyre maker

- Samar SrivaStava

In the long run, successful entrepreneurs rarely look back and brood over what went wrong. Ask Onkar and Neeraj Kanwar, the father son duo that run Apollo Tyres about the $6 billion in sales target they had set for the company in 2011 and you get a crisp, “That was put aside after the Cooper [Tire] deal didn’t go through.” Neeraj hastens to add that he doesn’t think about the failed deal anymore. Ask them about their exit from the South Africa market in 2013, eight years after paying 290 crore for the Dunlop brand and Neeraj says, “I don’t see it as a disappointment, I see it as a learning curve.”

Instead, they’ve shrugged off the disappointments and worked hard at what is in their control: Making the company India’s second largest tyre maker. Today Apollo has a growing global footprint in Europe, the Middle East and Asean. While their stated goal of globalising Apollo is still work in progress, for the first time in its history Apollo is not dependent on a technology partnership with a global tyre maker.

While a five-year financial snapshot doesn’t present a rosy picture, the Kanwars put that down to investments made for future growth. In the last five years sales have been flat, rising 0.8 percent a year to 15,095 crore. In the same period, profit fell to 724 crore from 1,011 crore with a return on equity of 7.3 percent. With investments—a new plant each in Europe and India and a research and development centre in Germany—in place Neeraj, 47, is convinced that the company is on the path to sustained, rapid growth. “Our return on equity will improve going forward,” he says. For now the market has bought his explanation. Despite lower profitability there has been no significant derating on the stock.