Apollo Tyres Ltd
BSE:500877
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Apollo Tyres Ltd
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Everyone, on behalf of IIFL, I welcome you all to the post results conference call of Apollo Tyres. I also take this opportunity to welcome Gaurav Kumar, Chief Financial Officer; and other senior management personnel, including the Investor Relations team. I request Gaurav to make the opening remarks, which would be followed by Q&A. Over to you, Gaurav.
Thank you, Joseph. Good afternoon, everyone. Let's begin with our usual sequence of the opening remarks. For the consolidated operations, the net sales for the quarter stood at INR 43.5 billion, a decline of 6% year-on-year, though it was growth of almost 11% on a sequential basis. This comprised of India revenues, which declined by 6%, whereas our Europe manufacturing operations registered a growth of 4%.The EBITDA for the quarter at INR 5.3 billion showed an improvement against the same quarter last year and also the preceding quarter. In terms of our debt number, it was flattish to slightly lower vis-à-vis the number at the end of last quarter. Both the operations took significant measures on working capital efficiencies to have release of cash and improvement on the debt position, even while our CapEx program in India went on.Moving on to the Indian operations. The sales for the quarter were at INR 27 billion, a decline of 11.5% over the same period last year and almost flattish on a sequential basis. Much of this decline is coming from a volume basis. Prices and a mix has been positive. But given the significant slowdown in the OEM segment, the overall sales number were under pressure. The sales volume, given the situation with OEMs, are down nearly 50%. On the other hand, in the replacement segment, we continue to gain ground. We've had an overall revenue increase of 6%, which is driven by significant increases vis-à-vis the market in the passenger car segment, volume gains of nearly 30%; light truck radial segment, volume gains of about 40%; 2-wheeler, volumes up 30%. The OE demand signs of some pickup vis-à-vis the last quarter are there, and it will come back in its due course of time. So overall, with the gains made in the replacement market and as and when the OE demand comes back, the operations are in a good place. The EBITDA in the operations at INR 3.6 billion were at 13% compared to 11% for the same period last year and an 11.7% in the preceding quarter. The raw material basket went down by 3.5%. And in spite of no operating leverage coming through, the margin still improved. And the raw material scenario continues to be benign given the outlook for next quarter is further down, which would further be a tailwind in terms of the margins. Moving on to the Europe operation. The Europe market itself has also faced a market situation, which is negative. In the passenger car segment, the market is down by about 3% to 4%. Yet, the Apollo Tyres operations on the passenger car segment is up 3%. So we have gained ground in the market, and this is also combined with a mix enrichment. Even on the truck, where the market is flattish, we have made significant improvement in our volumes, and we are continuing to make inroads. But the operations have continued to grow in a difficult market, the situation on profitability is still not at a desired level. There are actions being taken on various front to improve the cost of manufacturing, mix enrichment, et cetera, which will drive the European profitability going forward. The EBITDA for this quarter was at 9.5% as compared to a similar percentage for the same quarter last year. For reifen, the sales for the quarter were at EUR 69 million, up 4% vis-à-vis last year. The EBITDA for this quarter was significantly higher at 8% vis-à-vis 6.5% for the same period last year given that this is the peak seasonally.That's all from my side. We would be happy to take your questions.
[Operator Instructions] The first question is from the line of Ashutosh Tiwari from Equirus.
First question is maybe -- hello? Sir, what is the revenue in European operations -- manufacturing operations?
EUR 142 million.
Okay. Versus last year, how much it was?
Last year was -- just a minute -- EUR 136 million.
Okay. Also, if you look at European operations, I mean, the subsidiary, if you look at the consol and the stand-alone, depreciation charges have been increasing every quarter. I mean I think the plant was already commissioned. So how should we look at going ahead? I mean is there still some commissioning remaining or...
There is now only a small bit remaining. The depreciation charges has been going up as the entire capacity doesn't come on stream in one go. And hence, while you see that the plant has started operations, the capacity was ramping up. Post FY '20, you should not see an increase in depreciation. And also, there would be an impact on account of the lease accounting.
Okay. Okay. And lastly, can you share the volume growth in India replacement segment wide, like you shared for PCR and the 2-wheelers, but for TBR and TBB and all?
Sure. So for truck, the volumes were down 18% year-on-year basis. For passenger car, it's up slightly, about 1%. Which other segment did you said? This is quarter over same quarter last year.
This is only -- this is I think total volume. I'm just talking about replacement volumes.
Sure, sure. So truck replacement was up 2%. Passenger car, as I mentioned, 30%. Light truck, I mentioned earlier, was -- light truck radial was 40%. Light truck bias, again, a similarly high number of close to 20%.
And in truck, TBR and TBB separately?
It was same, 2%.
Sir, I mean, are we seeing some deceleration in the TBR segment demand or competition intensity has become higher, so that is impacting?
Competition intensity hasn't increased in the truck area. And this is just maybe a marginally off on our year-to-date number. So the fact is that in the truck side, the OEM demand fall has been much higher than the other side. And even on the replacement side, the market hasn't grown that much. So while the market has performed better on the passenger car, et cetera, we haven't lost market share, if that is what you're wanting to know.
Next question is from the line of Pramod Amthe from CGS-CIMB.
Two questions. One, the European operations, the back to profits. Do you attribute that to still the seasonality? And the underlying new plant, how should that behave as we go into the next quarters? Any improvement purely on the new plant side?
Yes. So the seasonal part, Pramod, is what it is. For example, the sales and the margins of this quarter are higher vis-à-vis the previous quarters. That's the seasonal impact. In terms of going forward, yes, the Hungary plant continues to ramp up and stabilize, and we see that in its cost of production coming down every quarter. And that would be one big driver of improvement in profitability.
And where does Hungary plant stand as of now in terms of EBITDA or EBIT per se?
We would not be able to share Hungary plant EBITDA. And also, it would not make sense, Pramod, because if you were to take the same question and say what is Chennai plant's profitability or Baroda plant, the fact is that there is a common infrastructure or head office of European operations, which is another legal entity. So the Hungary entity or the Hungary plant's P&L in itself, it's a manufacturing P&L with transfer pricing norms. That in itself does not give you the true picture of European operations' profitability.
And coming to the India business, where you have seen a consistent improvement in margins, and there seems to be some, particularly in terms of volume growth. In the context of the competition sets up a new plant, recently opened up a new plant, do you see the competitive intensity going up in the coming months or quarters, and then this trend can be relatively challenged in terms of margin and volume recovery for you?
See all the competitors, including us, were surprised with the drop in OEMs and particularly the extent of drop in OE business. And that hit all of us. And to that extent, from the announced plans, the CapExs have been slowed down by everybody like we have. Based on the market information that we get, all the players have slowed down the CapExs. So is there specifically some capacity coming up, which will alter the demand-supply economics in near term? No.
And what will be your CapEx for this year and next year? Any changes there?
No changes there. As we mentioned, we had cut back our CapEx by about INR 300 crores. We had started the year with an estimate of INR 2,700 crores. That's been scaled back to INR 2,400 crores, and that's still that. And for the next year, the number should be in the range of INR 1,400 crores to INR 1,500 crores from an earlier plan of INR 1,700 crores, INR 1,800 crores.
[Operator Instructions] Next question is from the line of Abhishek Jain from Dolat Capital.
Congrats for a good set of numbers in such a challenging environment. My first question is related with the volume growth in last 9 month. What was the volume growth we have seen in replacement segment? And what sort of the degrowth we have seen in this OEM segment?
So in the replacement segment for the 9-month period, truck volumes are up by 5%, passenger car by about 25% for us. OE side, the volumes are down 50% for truck and about 35% for passenger cars.
And sir, just wanted to know the growth or degrowth in the revenue from CVs, passenger vehicle, LCV and OHD segment in the last 9 months.
I would not have those numbers readily, Abhishek, which is in terms of the revenue numbers.
Okay. Sir, just what is the current capacity utilization of the Chennai TBR and PCR facility?
Just a minute. Right now, the utilizations, given the demand scenario, are low. In Chennai, we are at a utilization level of 70%.
In TBR and PCR both?
Maybe marginally different. TBR is lower, whereas on passenger car side, overall because it's across multiple plants, we closer to 90%, whereas on the truck radial side, we are below 70%.
Okay. Sir, as per your greenfield plant -- Andhra Pradesh greenfield plant that will be commissioned in the 4Q, what is the peak revenue from this plant?
Abhishek, will depend on how the prices are. The ramping up would happen over 2 years. So in terms of the full capacity being available, you're looking at FY '23.
And what can be the peak revenue if we assumed 100% utilization on that front?
Should be INR 4,000 crore-plus.
Next question is from the line of Aditya Pai from IndiaNivesh Securities Limited.
Mayur here. Just trying to understand the mathematics of volume. So you mentioned for the quarter, the PCR, LCV, everything is up by about 30% in the replacement, correct?
That's correct.
And this replacement is typically about 75% of the total volume?
Not in every segment. In passenger car, it's closer to 50-50. 75-25 equation is more in truck category.
All right. Even then, so if your 25% volume of the OE is down by about 50% and your 70% volume is -- 75% volume is still up by about 2%, have you seen a realization degrowth by any chance? Because our revenues are down 6% Y-o-Y, right? So I still don't understand that how come the equation doesn't set right.
No. The realizations are not down. The volume or the prices have held up. There are other product categories, farm, for example, where the volume growth in replacement is a single digit. We talked of primarily the 2 big segments, which comprise 80%. And then there is the export part of the revenue, which is also negative.
Okay. Because you mentioned PCR replacement is up 30%. And overall, PCR is up 1% for the quarter, including OEM?
That is correct.
So which means that your PCR OEM would be declining by about 25%?
That is correct.
Next question is from the line of Priya Ranjan from Antique Stockbroking.
One is on overall volume, I mean, domestic business. What was the overall volume growth or decline?
At an aggregate level?
Yes, at an aggregate level.
At an aggregate level, the volumes were down 13%.
13%. Okay. And I just missed. What was the 2-wheeler growth in terms of OE in replacement?
We don't do OE business in 2-wheelers currently. The replacement volumes were up 30% for the quarter.
Okay. Okay. And any thought on this tractor off-highway and tractor side?
Thought meaning?
I mean in terms of growth. You said single-digit or something?
So the replacement side was 5% growth.
Okay. Sir, I mean, you used to give the raw material breakup. I mean how is the basket moving up in terms of...
Sure. So the raw material basket, as I mentioned, was down 3.5% vis-à-vis the previous quarter. The average price for natural rubber was INR 145 a kg; synthetic rubber INR 115; carbon black INR 85.
Okay. So in terms of -- you said that prices are benign, even in fourth quarter. So which segment you see that -- I mean, the carbon black, you see more price correction or even synthetic rubber and carbon because natural rubber, I think it's roughly in the same range?
I don't have the breakup as to which one is going down by how much. But the expectation is about 1.5% to 2% decline in raw material in Q4 vis-à-vis the December quarter.
And sir, in terms of total European operation. So when can we see that like EBIT level breakeven? I mean what's your thought on...
Based on the measures that are being taken, and it's not a situation we ourselves are happy with, we think FY '22 is when we would start realizing all the benefits, including a fully scaled-up Hungary plant and an improvement shown.
Okay. So '22 should be classify -- I mean, we can consider that as a year of profitability in terms of a PBT level or so for that entity?
Sure.
[Operator Instructions] Next question is from the line of Siddhartha Bera from Nomura.
Sir, on the Europe side, again, I mean, over the last 1 year, in the domestic wise, we have seen is around 200 bps of margin improvement because of lower commodity. We have basically not seen any margin improvement over the year, probably because our Hungary plant is ramping up. So any thought that despite growing, what will be the key driver of margin improvement in Hungary? And where is it in terms of utilization levels currently?
The current utilization levels of Hungary also -- see one factor which has influenced the overall European market and our operations is market being in a negative zone. If the same market was up 1%, 2%, and we were outperforming by the same quantum, then we would -- our volumes would be up at 7%, 8% instead of the 4%. And that itself brings a significant amount of operating leverage. So one of the biggest factors influencing the current level of profitability is the overall market situation and a lack of operating leverage coming through. In terms of the Hungary operations utilization, that would still be around 70%. As that goes up, the cost of production, the cost competitiveness improves significantly. So it's essentially driving these 2 factors, and then the operating leverage kicking through for an improvement in margins.
Got it, sir. But any thoughts you have FY '21 based on current trends? How is that you'd expected to pan out for you in Europe?
I cannot give out a margin guidance, Siddhartha.
Sir, on the volume growth side.
To market share gains, where the overall market growth will come, it's a difficult thing to predict. The general mid- to long-term expectation of the European market, which is also borne out by the past trend and what is being predicted, is a 1% to 2% growth.
Okay. So around 4% to 5% is the steady-state growth we should expect in the Europe business for the next -- in the medium term, at least, if not the industry picks up. But sir...
Volume for passenger cars overall in a revenue terms with mix enrichment that is constantly happening, with truck business coming in, et cetera, the top line growth would be higher single digits is what is a reasonable expectation.
Okay. And when does the OE businesses are -- OE -- I mean the sales are meaningfully expected to ramp up in Europe?
Currently, the business is small, just about 200,000 tires. That ramping up is happening. We have -- apart from VW and Ford to whom we are supplying, we are in fairly final stages and beginning supplies to some of the premium OEs. We think that over a 5-year horizon, this number should go 3 to 4x from the current level. So it would still be a smaller chunk of the overall business. Even 3 to 4 years down the line, it would still be 10% of our overall volumes.
Next question is from the line of [ Amin Thirani from New Securities Limited. ]
My question is -- and pardon me if I'm repeating the question because I joined in a bit late. In your passenger vehicle replacement side, you grew volumes by around, I think, 30%, as you mentioned, in India. So are you gaining market share? Or I mean, is the market growth suddenly growing by that much because this doesn't seem to be a normal market growth for replacement?
Yes. [ Amin ], it's still too early to get the market data from the associations. We don't have that recent number. But we believe we have gained market share in the replacement segment. Our internal estimates is that, yes, the market is bullish on the replacement side but not of this quantum.
Okay. Okay. Okay. And in -- and this does not include any like volumes we exported to Europe, right? There's no contribution or a meaningful contribution coming from there?
No, no, this is domestic replacement that I'm talking about. Exports is separate.
Okay. Okay. And just in Europe, I think one of the -- I think KRAs, I think, you were tracking and obviously, it should be a driver of margin improvement is the share of high-performance tires. And I think you had mentioned that there's a gap between you and the big guys, which is narrowing. So where would you be today and where is those targets, say, 2 or 3 years down the line?
I mean I don't have that figure readily. But if I recall correctly, over the last 2, 3 years, our proportion of UHP, as we call it, has gone up by about 4, 5 percentage points. We should be now in the high 20s vis-à-vis the early 20s that we were. And the target over the next 3, 4 years would be to take it up to a 35%-plus, which would then be aligned with the market. Even in the current quarter, for example, our growth in the UHP segment is much higher than the market.
Next question is from the line of Ashutosh Tiwari from Equirus Securities.
What is the CWIP number in domestic of India operations as of December? And how should we see depreciation moving into next year in stand-alone?
I didn't get your question. Could you repeat?
What was the CWIP number, capital work in progress, as of December in stand-alone? And how should we look at depreciation moving into next year?
So the CWIP number, Ashutosh, I would suggest you'd get from the Investor Relations team. I don't have it readily with me. Going forward, the depreciation would increase as the AP plant kicks in. So the depreciation in the Indian operations would go up next year. In terms of specifics on CWIP, et cetera, and how you see that going forward, please interact with the Investor Relations team.
Sure. And the AP plant will ramp up from which quarter?
It was not producing by the end of this year. And then it will ramp up to its capacity of 15,000 car tires and 3,000 truck radials over a 2-year time frame, so by the end of FY '22.
Okay. And you mentioned about improvement in working capital. Can you share to what extent we have cut working capital during the quarter, and how should we look at it going ahead?
I think we have released about INR 100 crores [ plus ] finished goods inventory and raw material. It's not that the numbers were inefficient. It was a call given the tough time. So is it something that could continue to be driven down quarter after quarter? No. But the operations, given still that the environment is challenging, is looking to maintain at these levels. So there may be small improvements but not the kind of improvements that we have done in this quarter.
And how much basically CapEx we did in the last quarter and 9 months also?
Just 1 minute. So over 9 months, the CapEx is about INR 2,000 crores.
And last quarter only?
I don't have the number for last quarter right now.
Next question is from the line of Shyam Sundar Sriram from Sundaram Mutual Fund.
Sir, on TBR side, we did mention that on the replacement there has been a growth of about 2% year-on-year. Just to -- is there any improvement in the buoyancy over the last 2, 3 quarters? Or are the volumes nearly the same? Because last year, in the base, we did have a pretty good double-digit growth in the TBR replacement side, if I recall correctly. So compared to that, I would say is it more of a base impact? Or are we seeing any pickup in terms of the TBR replacement from last quarter as we move forward?
Current [ year ] across quarters, it's fairly same. In terms of overall for the 9-month, our TBR volumes are up in [indiscernible] to a high single digit.
Okay. Okay. Okay. Understood, sir. Sir, on the passenger car radial, there -- are you -- was there any deferment of purchases from the second quarter to third quarter? Is that what is leading to a very strong growth there? Or are there any market actions that we have taken that has helped us this kind of a growth? Because you also alluded that the market -- underlying market may not be as bullish as the growth that we are -- that we have displayed this quarter. So just wanted your thoughts on that.
To our knowledge, there's been nothing like a deferment by people from second quarter to third quarter. There may be a rush in fourth quarter for buying vehicles given the switch that is coming. But in terms of placement market or OE, there's been no significant sort of [indiscernible] from second quarter to third quarter.
Right. Sir, just one last question. On the raw material cost side, I mean, given the China market has been very weak in the last month or so, we are hearing that major rubber manufacturing countries are looking to other nations to offload the rubber. Are we seeing any imported natural rubber prices coming off sharply this quarter? Are there such -- any indications of that sort?
Yes. So there is [indiscernible] rubber prices, and that is contributing to our expectation of fourth quarter raw material prices being lower than the December quarter.
Next question is from the line of Bharat Gianani from Sharekhan.
My question is more related on the truck replacement segment outlook for the next year. So what I'm trying to understand is that there was an excess capacity created in the system this year because of the axle load norms. And despite that, I think, in 9 months, you mentioned that you have still seen a buoyancy of, like, 5% to 6% growth in FY '20 -- in 9 months of FY '20. So my question is what's your outlook for FY '21? With the absorption of capacity of the high axle load norms, do you expect the replacement sales in the truck segment to pick up in FY '21? Or directionally, what is your view on that? Any comments on that would be helpful.
Sure. So the axle load norm came in last year, so it's been absorbed and settled for quite a long time. [indiscernible] fundamental driver of truck replacement is always economy. And we have done well. As I mentioned earlier, we may not have gained market share, but we've maintained our market share on the replacement side. Going forward, as the economy picks up, one would expect that the truck replacement demand would only be better next year vis-à-vis the current year.
Okay. But do you expect a double-digit kind of growth in truck replacement in FY '21 at the industry level?
Difficult for me to give an estimate. If I could have all the parameters, which are dependent on that -- an estimate given on that, then --
Yes, sir, a bit tough to predict actually. That's fine. But -- fair enough. And sir, just last question from my side is what's the overall European operations EBITDA margins in 9 months FY '20 compared to 9 months FY '19?
Just 1 minute. Over 9 months, the EBITDA margin for the European operations is 8% vis-à-vis 9% last year.
Okay. This includes manufacturing and reifen, both?
No. This is only the manufacturing and sales.
Okay. And the reifen, if you can give the number?
Just a minute. The EBITDA is a little below 6% vis-à-vis 3% last year.
Okay, okay. And sir, just last question from my side. You pointed out that there is an expectation of high single-digit growth for the European operations because we are gaining market share and the mix is also improving. But this is based on the assumption of a flat growth or the current market scenario of a negative decline?
This is based on a European market situation of anywhere from flat to 2% growth. So you could say this builds in an average market growth of about 1%.
Next question is from the line of Jay Mehta from Edelweiss Broking Limited.
Chirag here. Gaurav, just 2 questions. One, given the strong replacement sales that you have recorded across categories, I presume your profitability should have been slightly better, kind of contribution we have received. So is there any other offsetting cost pressures, which has come in the quarter?
There are no one-off costs, Chirag. Over time, the differential between OE and replacement profitability has reduced significantly. Particularly on the truck side, the differential is fairly marginal. So while the replacement share has gone up, as you correctly mentioned.
And any particular reason why this is changing? I previously thought it's changing for industry in general and not just for you.
See, for the others, how the profitability stacks up across different categories, you would not have a preview to that. So it's difficult for me to say what our competitors makes across OE and replacement for different product categories.
Okay. But is there any specific reason why the differentials or it's a concise choice you have made? Or is it more pressure on bias side or radial side? If you can just help us understand, it would be helpful.
It's a journey, which has been traveled over several years also vis-à-vis the mix improvement as to which business we go after. In case of some of the OE business, if it's at prices [ towards margins ] which does not make sense for us, then we do not go in for that. So there have been times when we have let go of certain businesses because from a margin profile perspective, it does not make sense for us. So the mix -- it's a journey which has been done over years and years to narrow down the gap between the two.
Okay. And second was, how do you look at the mix in Europe from near-term perspective, say, next 12 to 18 months? Can there be a shift in mix, which would help you have a better realization as compared to volumes?
So the market mix itself is changing in Europe. That's the case in India also, but in Europe even more sharply. The proportion of UHP, as we discussed earlier in an earlier question, is increasing. Even in the current year, when the overall market is negative, the UHP proportion has had a positive growth. So the market itself continues to move up. Even within an overall category, the all-season tires, which are higher end vis-à-vis a summer tire, are growing much faster. So the market mix continues to improve, but we are further attempting to bridge the gap that we have vis-à-vis the bigger players on the UHP proportion.
Okay. Okay. Okay. This is helpful. And lastly, one, if I can just take one more question. On the -- you had indicated that commodity cost is largely benign, right? At least for the -- for Q4, it is largely benign. Is it the right statement that I heard?
Yes.
And it's for both India as well as Europe?
That's true because we are talking of the fundamental prices. So it will be benign for both the operations.
Next question is from the line of Aditya Pai from IndiaNivesh Securities.
Just needed some check. So just trying to analyze, could there be an impact of the coronavirus on the Chinese tire imports into Europe? So just wanted to understand what could be the typical tire size for the Chinese imports out there.
The Chinese imports is fairly significant in Europe, and it's a question which presently it's too early in the day to say what is the impact. But yes, given some of the restrictions and how it pans out, there could be an impact on Chinese tires coming into Europe or, for that matter, any geography.
And then would that mean that it would be a direct beneficiary to the Tier 2 tire suppliers like us also?
It would be a benefit across the segment. And yes, there is a potential upside on account of that. But how different supply chains are getting impacted on account of the coronavirus is still to be seen given that China's presence across different supply chains is significant. So there could be a potential upside if the Chinese imports comes down to different various players, including us.
Okay. Last question on -- so a follow-up to this only. So in case if we believe that we do get this advantage, would we be in a position to really take advantage looking at the capacity utilization? And will this grow out of India or we will have the capacity available in the European plants to really cater to these additional demand, if at all, it comes our way?
No. We currently, as I mentioned, has enough capacity. The capacity utilizations are not at their end. And so if that potential upside was to come, we have capacity in Europe also. We don't need to be sending tires out of India because that capacity is not there. Or for that matter, if that benefit comes into in India, we have capacity there also.
Next question is from the line of Priya Ranjan from Antique Stockbroking.
One is on the export -- overall export. What was the growth in domestic or numbers -- export number you can say?
Just a minute. Overall for the 9 months, exports were up 3%. And for the...
For this quarter.
What else did you say?
For this quarter?
For this quarter, they were down 6%.
Okay. And given the pricing of commodity and raw material being benign, how do you see the pricing behavior in domestic market? Do you see, I mean, some pass-through to OEM plus some price correction in replacement as well?
With a large number of OEMs, there's a pricing formula. So the raw material movements get passed on, on a quarterly basis. Otherwise, we haven't seen any pricing action in spite of the market conditions being what they are.
So even in OEM side, because the volume is low, so you are not able to pass-through the price correction, right?
Wherever there is a formula-linked prices, it gets passed up or down the way raw material moves.
Okay. Okay. And then replacement side, you don't see any pricing action by any competitor or so in recent times?
There's been nothing in recent times.
The next question is from the line of [ Hiten Bharucha from Sequent Investment. ]
Sir, what was the volume...
[ Hiten ], sorry to cut you. May I request you to speak little louder?
Okay. Am I audible now? Is it clear?
Yes.
Sir, what was the volume growth for this quarter vis-à-vis last quarter and last year?
For which? Overall, you're talking about?
Overall volume growth.
Overall, the volumes were down 13% in the India operations, as I mentioned earlier.
13% compared to?
Same quarter last year.
And what about quarter-on-quarter?
Quarter-on-quarter, they were down 2%.
It was down 2%. Sir, any volume outlook for FY '21, '22?
That's a very difficult one with various categories to give you an overall volume outlook. We expect things to recover and growth to be back. What will be that quantum is a very difficult thing to say. Still depends on a -- to a significant level on the OE demand coming back. Replacement continues to be very good. There are no signs that, that should be impacted, but there is a largish OE component, and that recovery is needed for growth to come back to a good level.
Thank you. As there are no further questions, I will now hand the conference over to Mr. George for closing comments.
Thank you, Nirav. On behalf of IIFL Securities, I thank the management of Apollo Tyres for taking out time for this call. I also thank everyone for dialing in. Have a good day.
Thank you very much. On behalf[Audio Gap]