Apollo Tyres Ltd.

September 2012

apollotyres.com

36 Years Young Company

Multi-national, originating in India
Manufacturing presence in 3 continents Asia, Europe & Africa

Publicly listed, promoter family owns ~47% 27% CAGR over last 5 years A global Top 15 tyre company Consistently profitable with an unbroken dividend record since 1989

Key Milestones
1976:Registration of Apollo Tyres Ltd. 1991 : Second Plant in Limda, Gujarat 2006:Acquired Dunlop Tyres in South Africa

2010 : Chennai Greenfield for truck & car radials

1977 : First plant in Perembra Kerela

1995 : Third Plant at Kalamassery, Kerela 2009:Acquired Vredestein Banden BV in Netherlands

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Industry Overview

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Indian Tyre Industry Strong Volume Growth

Revenue Segmentation Industry dominated by Commercial Vehicles segment
Othe rs , 3% Two Whe e le rs , 13% F a rm , 8% Truc k/ B us , 54% P a s s e nge r C a rs , 14% Light Truc ks , 9%

Strong demand growth across various product segments

124.0 114.0 104.0 94.0 84.0 74.0 Mn No. 64.0 54.0 44.0 34.0 24.0 14.0 4.0 -6.0
FY 2003 FY 2004 FY 2005 25.6 2.3 8.4 2.1 7.8 25.8 2.3 10.0 2.3 8.7 27.9 2.7 11.9 2.9 8.8 2.1 2.1

2.3

Domestic Sales Volume

2.3 2.7 2.4 2.2 2.2 35.2 30.3 3.0 13.6 3.1 9.9 FY 2006 3.8 14.2 3.3 10.7 FY 2007 3.8 16.8 3.7 11.6 3.8 18.8 3.7 11.7 FY 2009 22.5 4.3 13.6 4.9 38.7 40.1 48.4 2.4

2.2

CAGR FY 03 - 12

CAGR FY 08 - 12

61.9

65.2

Two Wheeler

10.9%

13.9%

5.4 29.3 4.6 14.7

5.6

Farm Passenger Cars Light Truck Truck/ Bus

10.3% 15.4%

10.0% 15.8%

30.3 5.0 14.4

9.9% 7.1%

7.6% 5.7%

FY 2008 Farm

FY 2010 Others

FY 2011

FY 2012

Truck/ Bus

Light Trucks

Passenger Cars

Two Wheelers

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Indian Tyre Industry Low radialisation in truck segment

Expected to reach 35%+ in the next 3 years owing to infrastructure development and OE thrust

Truck Radial Market Share

Radialization Levels
Wo rld Africa / Middle Eas t India Asia South America No rth America Eas tern Europe Central Euro pe Western Euro pe 0% 20% 40% 60% 80% 27% 95% 100% 100% 120% 21% 52% 65% 96% 68% 72%

Imports, 18%

Do mestic Production, 82%

Most of the demand now met by domestic production

Opportunity in Truck Radial Segment

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Indian Tyre Industry Demand Supply situation : Truck Radials

Truck Radial Supply Industry Capacity (Mn Units)
Apollo, 35% Others, 65%

Apollo, 27%

Apollo, 32% Others, 68%

1.2 1.3 0.3 6.3

Others, 73%
7.5

1.2

4.7

0.7 2.7

FY 2012

Apollo

Other Players

FY 2013 E

Apollo

Other Players

FY 2014 E

Other Players

FY 2015 E

0.8

1.5

Capacity being built up to take care of increase in future demand

Demand Vs. Supply

7.5 6.8 6.8

0.6 4.7

0.8 4.5 4.1

FY 2013 E Capacity Imports Exports FY 2013 E FY 2013 E Domestic Demand Availability

FY 2015 E Capacity Imports Exports FY 2015 E FY 2015 E Domestic Demand Availability

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Indian Tyre Industry Demand Supply situation : Passenger Car Tyres

Passenger Car Tyres Supply Industry Capacity (Mn Units)
Apollo, 25%

Apollo, 24%

Apollo, 24%
Others, 75%

Others, 76%

Others, 76%

1.6 0.9

38.8

0.5

39.2

5.6

36.2

1.9 28.7

FY 2012

Apollo

Other Players

FY 2013 E

Apollo

Other Players

Demand Vs. Supply

5.0 4.3 36.8 34.3 39.2

FY 2014 E Other Players 6.0 3.9

FY 2015 E

Further capacity is in line with the future demand

41.4

41.6

36.2

FY 2013 E Capacity

Imports

Exports

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FY 2013 E FY 2013 E Domestic Demand Availability

FY 2015 E Capacity

Imports

Exports

FY 2015 E FY 2015 E Domestic Demand Availability

Indian Tyre Industry Imports vis-a vis domestic availability

Michelin, 16% Chinese/ Economy brands, 38% Hankook, 8% Yokohama, 6%

5,000 4,500 4,000 3,500

Imports - Passenger Car Tyres

4,239 17% 3,242 10% 6% 3% 1,004 211 FY 2003 551 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 1,064 930 9% 7% 1,498 9%

4,761

16% 15% 3,300 10% 14% 15%

% of domestic availability

20%

Other Branded, 32%

Units '000

3,000 2,500 2,000 1,500 1,000 500 -

Branded tyres sell at a competitive price. The Chinese/ Economy brand sell at a 10 15% discount

5%

0% FY 2012
Chines e/ Economy brands, 36% Michelin, 50%

Imports - Truck Tyres

1,200 1,000 800 600 400 200 1% 80 FY 2003 1% 192 97 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 8% 7% 1,032 778 864 4% 6% 5% 4% 604 3% 2% 1% 0%

7% 885 5% 560

6%

% of domestic availability

Units '000

Imports upto FY 2006 were primarily cross ply. Radials gradually increased with increase in radialisation level and anti dumping duty on cross ply - Cross ply currently is negligible
3% 333

9% 8% 7%

Other Branded, 14%

China and Thailand constitute 90% of Economy brands

2%

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Indian Tyre Industry Market Share

Truck
Others, 4% Goo d year, 0% Impo rts, 4%

Light Truck

Passenger Car

Others, 14% Go od year, 0%

Impo rts, 0% Apollo, 27%

Imports, 16% Others, 3%

Apollo, 17%

Birla, 14%

Apo llo, 27%

Birla, 6% CEAT, 7%
Bridgestone, 18% MRF, 21%

CEAT, 11%

MRF, 21% JK, 19%

JK, 19% MRF, 26%

Good year, 13% Birla, 0%

JK, 9% CEAT, 3%

Apollo's Market Share

35% 30% 25% 20% 15% 10% 5% 0% FY 2003 FY 2004 FY 2005 FY 2006 FY 2007
Truck

27%

29%

28% 31%

28% 28%

27% 27%

27% 28%

28% 25%

27% 26% 16%

26% 21% 19%

27% 27%

Reduction in truck tyre market share in FY 2011 is on account of lost production due to plant shut down in the first half of the year

25% 21%

17%

13% 7% 9% 10% 11%

13%

13%

FY 2008
Light Truck

FY 2009
PCR

FY 2010

FY 2011

FY 2012

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South Africa Tyre Industry Market Share

Passenger Car
12.0 25% 30% 23% 22% 18% 5.5 4.7 3.9 4.0 2.0 CY 2002 CY 2003 CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 10% 5% 0% 5.9 5.7 6.2 6.2 6.5 6.6 6.9 15% 25% 20%

Industry Sales ( Mn No.s)

10.0 21% 8.0 6.0

22%

22% 19%

Apollo Market Share

21%

22%

Loss in market shares in last 2 years due to influx of Chinese imports

Truck
2,000 1,800 28% 24% 21% 23% 22% 22% 18% 18% 28% 25% 25% 20% 15% 898 660 526 759 753 957 992 739 969 1,057 10% 5% 0% CY 2002 CY 2003 CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 30%

Industry Sales ( '000 No.s)

1,600 1,400 1,200 1,000 800 600 400 200 -

apollotyres.com

Apollo Market Share

10

Europe Tyre Industry Market Share

Passenger Car
550 1.6% 1.4% 1.2% 1.2% 1.3% 1.3% 1.4% 1.4% 1.5% 1.7% 1.8% 1.6%

Industry Sales (Mn. No.s)

500 450 400 350 300 250 200 337 350

1.2% 385 363 371 391 372 340 374 382 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% CY 2002 CY 2003 CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011

Continued gains in passenger car tyre market shares with capacity ramp up

apollotyres.com

Apollo Market Share

1.4%

11

RM Cost Trend - Annual

RM Cost Trend
280 Base Price Index 240 200 160 120 80 40 FY 2008 FY 2009
Natural Rubber

234237 195 146 100 100 100 100 118 122 133 125 118 87 140 116 138 125 176

115

FY 2010
SBR 1502

FY 2011
Steel Cord Carbon Black

FY 2012

Overall RM Cost Trend

200 175 150 125 100 75 50 25 190 147 125 100 114
Base Price Index

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

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RM Cost Trend - Quarterly

RM Cost Trend
160

Base Price Index

122 120 80 40 Q1- FY12 Q2- FY12

Natural Rubber

129 107 109 91 108 112 85 102 113 116 85 110 115

128

100 100 100 100

95

Q3- FY12
SBR 1502

Q4- FY12
Steel Cord Carbon Black

Q1- FY13

Overall RM Cost Trend

125

Base Price Index

100 75 50 25 Q1- FY12 Q2- FY12 Q3- FY12 Q4- FY12 Q1- FY13 100 102 101 95 98

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Industry Overview Previous year highlights.

India Softening of demand Pressure on the cross ply truck tyre capacities due to increase in radialization & lower demand growth Europe Demand continues to grow with performance positively affected by previous strong winters South Africa Demand recovering though still not back at previous levels Imports continue to dominate the market and causing challenges for domestic players Overall Raw material cost push continued adding to pressure on margins Raw material prices stabilized in the second half though at high levels

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Industry Overview

Current year highlights.

India Recovery in replacement demand even though economy remains sluggish Decline in OE demand Europe Significant demand decline due to economic conditions no growth in volumes South Africa Demand continues to recover Overall Raw material decline leading to improvement in margins Raw material prices expected to remain soft

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Company Overview

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Apollo Tyres Growth Journey

Consolidated Top Line
140 120 100
Rs. Bn

CAGR (5 years) : 27%

40

Overseas

80 60 40 20 16 FY 2003 19 FY 2004 22 FY 2005 26 FY 2006 33 FY 2007 10 10 37 FY 2008 9 41 50 55 31 34

82

Domestic

FY 2009

FY 2010

FY 2011

FY 2012

Consolidated Capacity
1700 1500 1300 1100

CAGR (5 years) : 15%

Healthy top line growth aided by organic investment and strategic acquisitions in FY 2007 & FY 2010

345 345 325 150 175 175 1250 1050 431 FY 2003 496 574 656 680 745 775 835

Overseas

MT/ Day

900 700 500 300 100 -100 FY 2004 FY 2005 FY 2006 FY 2007

Domestic

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

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Apollo Tyres Growth Journey

10 Years ago Current

Brand Positioning Current 10 Years ago

Truck Bias Light Truck Bias & Radial PCR (S & T & H rated) Farm Bias Truck Radial UHP PCR (Upto Z rated) OTR Bias Farm Radial

Organic growth of revenue & market share in India during FY01 FY06 has been supplemented with the acquisition of global brands, technologies & markets in the last 5 years

Truck Bias Light Truck Bias PCR (S & T rated) Farm Bias

Product Portfolio apollotyres.com

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Apollo Tyres Growth Journey

10 Years ago
OEM , 13%
OEM , 18%

5 Years ago

Current
Even as OEM share continued to increase in India with growth and entry into passenger car tyre segment, replacement continues to enjoy a major portion of the pie - South Africa and Europe operations are primarily present in the replacement market

OEM , 27%

Replacement, 87%

Replacement, 82%

Replacement, 73%

Customer Segments 10 Years ago

Passenger Car, 2% Farms & Others, 7% Light Truck, 8%

5 Years ago
Farms & Others, 10%
Passenger Car, 33%

Current
Farms & Others, 12%

Passenger Car, 15%

A well distributed product portfolio compared to dominance of truck tyre segment earlier .

Light Truck, 12% Truck, 63%

Truck, 83%
Light Truck, 8%

Truck, 47%

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Product Segments

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Apollo Tyres Growth Journey

10 Years ago 5 Years ago Current
India India India South Africa Netherlands

Manufacturing Presence

10 Years ago
South Africa 21%

5 Years ago
Europe 23%

Current

India 100%

South Africa 11%

India 66%

India 79%

Revenue apollotyres.com

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Apollo Tyres Raw Materials

Raw Material Composition
Raw Material Sourcing Rest of World, 3%
Others, 22% Tyre Cord Fabric, 1% Steel Cord, 4% Carbon Black , 10% Natural Rubber, 43%

Africa / S. Africa, 5%

Natural Rubber constitutes the largest component of the overall raw material cost

India, 47% Asia, 33%

Synthetic Rubber, 20%

Europe/ CIS, 12%

Natural Rubber Sourcing

Synthetic Rubber Sourcing

Africa / S. Africa, 6%

Rest of World, 2% Africa / S. Africa, 9% India, 16%

Asia, 35%
Well distributed sourcing ensuring relationships with all major suppliers

India, 58%

Asia, 46%

Europe/ CIS, 26%

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Apollo Tyres Financial Track Record

Capital Investments
20.0 18.0 16.0 14.0 14%
The Company has consistently invested in growth over the years even in difficult times

16% 13% 14% 12%

% of Sales
EBIDTA Margin

Rs. Bn

10% 8% 6% 4% 2.7 0.7 1.8 1.7 5% 3% 3.1 1.5 6% 7.9

12.0 10.0 8.0 6.0 4.0 2.0 -

11.7 7%

10% 8% 6% 4%

Substantial Capital Investment in FY 2010 12 in Chennai Greenfield

8.7

2.1

2% 0%

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
14.0 12.0

EBIDTA
12.0 13.3% 9.5% 4.1 10.2 13.1% 14.7% 9.0% 8.2% 8.9% 6.1 8.8% 4.4 11.5% 9.9% 12.0

20.0% 16.0% 12.0% 8.0% 4.0% 0.0%

EBIDTA (Rs Bn.)

10.0 8.0 6.0 4.0

2.1 2.0 FY 2003

1.7

1.8

2.3

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

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Apollo Tyres Financial Track Record

Net Debt : Equity
30.0 25.0 0.9 27.0 0.8 0.7 15.0 0.5 10.0 5.0 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 0.4 4.1 5.2 6.3 3.6 5.3 0.2 0.3 2.7 0.4 0.4 0.7 22.9 1.0 1.2 1.0 0.8 0.6

Net Debt (Rs. Bn)

20.0

0.7 13.6

1.9

Net Debt : EBIDTA

30.0 25.0 2.6 2.3

Net Debt (Rs. Bn)

20.0 15.0 10.0 5.0 1.7

2.3

2.3

2.0 1.5 1.0 0.5 -

1.6

1.3

13.6

0.9 1.9 2.7 4.1 5.2

6.3

0.6 3.6 5.3

1.2

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

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Net Debt : EBIDTA

Proceeds from Equity Issue (Rs Mn) FY 2004 : 1,348 FY 2007 : 2,554 FY 2008 : 644 FY 2009 : 411

27.0 22.9

3.0 2.5

Net Debt : Equity

23

Apollo Tyres 3M FY2013 Financials

Net Sales
40 35 30 25 28.2 31.6

Rs Bn.

20 15 10 5 0

EBIDTA
4,500 4,000 8.7% 3,500 3,614 11.4%

3M-FY 2012
12%

3M-FY 2013

Net Profit
5% 4% 2.7% 3% 2% 1% 0% 3M-FY 2012 3M-FY 2013
Net Profit Margin

2,000
10% 8% 2,445 6% 4% 2% 0% 3M-FY 2012 3M-FY 2013

4.4%

EBIDTA Margin

1,500
Rs Mn

3,000

1,380

Rs Mn

2,500 2,000 1,500 1,000 500

1,000

771

500

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Apollo Tyres Stock Performance & Shareholding

Shareholding Pattern FIIs/ NRIs/ Foreign Promoters, 47% Bodies Corporate, 23%

Dividend Payout Ratio 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 9% 6% 6% 6% 16%

Retail Investors, 18%

FIs/ Banks/ Mutual Funds, 11%

150 140

Base Price Index

130 120 110 100 90 80 70 60

EV/ EBIDTA : 5.6 P/E : 9.1

Apollo Price

Sensex

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Apollo Tyres Looking Ahead

Strengthen leadership position in Commercial Vehicle Segment in India - ramp up of Chennai Greenfield to gain market share in truck radial segment Continue journey towards becoming a leader in the passenger car segment in India Continue volume gains in Europe through dual brand strategy Provide cost competitive production base to Europe operations through initially India and later a dedicated Greenfield Return South Africa operations to profitability

And the Journey continues..

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On a Journey To
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Move the World