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					  India, February 11, 2010



  Analyst / Investor Conference Call
  Third Quarter of Financial Year 2010-11


 Bhushan Gajaria:            Good afternoon everyone. I welcome you all to the Q3 FY11 earnings call of
                             Apollo Tyres. Representing the Apollo management are, Gaurav Kumar, Group
                             Head Corporate Strategy and Finance; Rakesh Dewan, Head, Accounts; and Ritu
                             Jain, Divisional Head, Corporate Strategy. Without any further delay I will hand
                             over the floor to Gaurav.


 Gaurav Kumar:               Good afternoon everyone. Thank you for joining the call. I will begin with a
                             brief introduction and then we can move over to your questions. On a
                             consolidated basis the revenues for the quarter were Rs 23.7 billion, up 3%.
                             This comprised a volume decline of 11%, coming primarily from the India and
                             South Africa operations, but made up for by the price increase impact of 14%,
                             which led to a topline increase. The EBIT margin stood at Rs 2 billion, 9% on
                             sales and significantly lower than last year, mostly impacted by the raw
                             material prices and the volume decline both in India and South Africa
                             operations. The consolidated net debt was at a level of Rs 21.3 billion.


                             Moving over to specific operations, Apollo’s India operations clocked revenue of
                             Rs 14.3 billion, up 8% on the same quarter last year. The raw material impact
                             continues to hit, which on YoY basis was up by 33%, although sequentially a
                             much lower increase of only 3%. That is because the organisation was able to
                             control the raw material prices, to some extent, through purchases that were
                             booked in advance. The EBIT margin for India operations was at 8%.


                             Moving over to the South Africa operations, Apollo was back in black after the
                             last quarter which was greatly impacted by the temporary shut down of
                             operation. The revenue at Rs 3 billion was up 2% and the EBIT level was at 3%.
                             The capacity was still not fully utilised, particularly due to the fact that the
                             domestic market is (a) still recovering and (b) the domestic players had to win
                             back market share, which was taken away by imports and, a stronger Rand did
                             not help them either.




Q3 FY2011, February 11, 2011                                                               Page 1 of 15
                         Lastly, the Europe operations continued to do very well. Seasonally it is their
                         best quarter because of the sale of winter tyres. The revenues were at Rs 6.5
                         billion with the EBIT margin at 12%.


                         Some of the other key developments are as follows. The Chennai plant
                         continues to ramp up and is currently at a level of 150 tonnes/day production,
                         which would continue to go up. The raw material pressure is likely to continue
                         and hence, margins will be under pressure in the next few quarters. We have
                         had a significant inventory build up in our India operations particularly in truck
                         tyres; this is because, there has been a certain amount of slowdown in this
                         sector, while we continued at full production in the quarter. We expect that
                         this inventory would be liquidated by March end and we should be back to our
                         normal levels of inventory. In both India and South Africa operations, we
                         expect the profitability to improve going forward due to higher volumes even
                         though the raw material pressure will continue.


                         In terms of outlook on the raw material front, sequentially we expect a 10%+
                         cost increase in our various operations. Price increases to counter the same are
                         being considered in all 3 geographies, though the quantum and timing may vary
                         in each geography. That is all I have in my introductory remarks and we will
                         now be happy to take your questions.


 Shweta Pandey,
 Anelec Infotech:        Sir, I would just like to get an understanding of the 9-month revenue for all 3
                         operations?


 Gaurav Kumar:           On a consolidated basis, the 9-month revenue was Rs 61.4 billion, up 3%. For
                         India operations, it was Rs 37.3 billion, for South Africa Rs 8.3 billion and the
                         balance from Europe.


 Shweta Pandey:          Sir, what would be the impact of Euro and Rand this year?


 Gaurav Kumar:           We will not be able to share this as it impacts every aspect of the operation;
                         therefore, it will be very difficult to give a number.


 Jaibir Sethi,
 CLSA:                   Congratulations on a great set of numbers. It is actually much better than
                         expected I would say. First question. What is the status of the Chennai facility
                         and what kind of production are we seeing there so far and what is the outlook


Q3 FY2011, February 11, 2011                                                            Page 2 of 15
                         on that? Secondly, have there been any price increases on truck-bus tyres in
                         the past few months and if not, then what is the outlook on that?


 Gaurav Kumar:           On the first one, the Chennai facility is ramping as per schedule. The capacity
                         has reached 150 tonnes/day and we would close the year with the planned
                         capacity of 200 tonnes/day by March end; and by March 2012 we should be
                         close to about 450 tonnes. So that is on track. To answer your second question
                         on price increases, we have taken a minimal increase of about 1% in
                         December/January. We did not undertake any price hike in truck replacement
                         as this segment was showing a certain amount of softness. Now, we are looking
                         at a price increase in February, as demand is coming back.


 Jaibir Sethi:           So you have started to see demand come back in this sector?


 Gaurav Kumar:           The demand situation seems to be now much better compared to what it was in
                         the last quarter.


 Jaibir Sethi:           And not much movement on the competition side?


 Gaurav Kumar:           MRF has taken a small price increase in January but, still the quantum of price
                         increase is 2-3%, which is not sufficient to offset the raw material cost push.
                         Tyre industry across the world will see margins decline, but in some of the
                         other geographies, price increase is being looked at.


 Jaibir Sethi:           I saw recently that Bridgestone has taken, at a regional level, a price increase
                         of almost 12% on truck tyres. So do you think India will see similar quantum of
                         increase later in the year or is that unlikely?


 Gaurav Kumar:           Bridgestone is hardly selling any truck tyres in the country, so that will not
                         really impact the industry dynamics in India


 Mahantesh Sabarad,
 Fortune Equity
 Brokers:                Could you explain the seasonality in the Europe operations and what would
                         March revenues be?


 Gaurav Kumar:           The revenue should decline by about may be 10-15%. We must take into
                         account that some of these seasonality factors also get impacted by previous
                         year’s events, quantum of winter tyre sales etc.




Q3 FY2011, February 11, 2011                                                           Page 3 of 15
 Mahantesh Sabarad:      In your opening remarks you mentioned that you have ended up with an
                         inventory build up in truck tyres. I would presume that is domestic truck tyres?


 Gaurav Kumar:           Correct; that is in India operations where there was a softened demand. Apollo
                         produced its full capacity once it came back from the lockout Also we had lost
                         market share and there was an attempt to win back the market shares with
                         some of the dealers. It takes a little time, so while in December we were back
                         at our 27% odd market share, overall for the quarter we have had some
                         inventory build up.


 Mahantesh Sabarad:      How much would that inventory be?


 Gaurav Kumar:           We have a finished goods inventory close to Rs 6.5 billion in India operations.


 Mahantesh Sabarad:      And since you would liquidate these inventories in the March quarter, will you
                         actually be booking lower profits? Is some portion of the profit already
                         reflected in the December quarter?


 Gaurav Kumar:           The inventory is valued at cost. We, in fact, are carrying lower value inventory
                         which would convert into profits in the next quarter; and to that extent we will
                         be better off.


 Mahantesh Sabarad:      How is your situation on the raw material? You did mention that quarter-on-
                         quarter raw material can be up by about 10%. Have you initiated any imports
                         taking advantage of the arbitrage?


 Gaurav Kumar:           That could be the case, but I will not have that information. This is being
                         looked at by Apollo’s Purchase department.


 Mahantesh Sabarad:      Since the government has allowed import of rubber at a lower duty rate,
                         subject to a quota of 40,000 tonnes, how much of that quota have you been
                         able to get?


 Gaurav Kumar:           That would be very small because 40,000 tonnes is for the industry as a whole.
                         What would really help is the policy, which will come into force next year --
                         the rubber duty would be capped at 20% or Rs 20. So at the current prices, the
                         duty levels will at least drop to about 10% and this will keep a check on the
                         domestic prices to some degree.




Q3 FY2011, February 11, 2011                                                            Page 4 of 15
 Amit Kasat,
 Standard Chartered:     Gaurav, can you give me the growth rates for the India operations on the OE
                         and the replacement?


 Gaurav Kumar:           India operations, in this quarter, has seen a decline of nearly 20% on the truck
                         replacement side vis-à-vis last year; primarily on account of lost production
                         and demand slowdown. In OE too we have seen a similar decline.


 Amit Kasat:             Because of the strike in the last quarter in the South Africa market, what was
                         the market share dent in South Africa for us?


 Gaurav Kumar:            In South Africa, we have generally lost about 4-5% market share across various
                         product categories; while the 4 key players in the industry, as a whole, have
                         lost about 15-20% market share.


 Amit Kasat:             And how much of that has been recovered in the 3rd quarter?


 Gaurav Kumar:           Practically nothing.


 Amit Kasat:             In India, in truck replacement, is it the same growth rate for the industry as
                         well?


 Gaurav Kumar:           Industry growth rate would be slightly higher. I do not have the specific number
                         offhand for the 3 months, but for 9 months, where the industry as a whole has
                         produced 7% higher, our production is down by 16%.


 Bharat Gianani,
 Asit C Mehta:           I just wanted to understand what is the margin difference, in the OE and
                         replacement segment, in the domestic operations?


 Gaurav Kumar:           We would not be able to share the margin details. But, in terms of pricing on
                         the truck front, the pricing difference in replacement and OEM varies between
                         10-15%, whereas in the case of cars it is as much as 30%.


 Mayur Milak,
 Alchemy Shares:         I just wanted to understand what is the average rubber price for the quarter,
                         previous quarter and same period last year?


 Gaurav Kumar:           The average rubber price in this quarter was Rs 185/kg, same period last year
                         was Rs 115/kg, and the previous quarter was Rs 175/ kg. Like I said before,


Q3 FY2011, February 11, 2011                                                           Page 5 of 15
                         there is a significant impact of stocking, sourcing etc., so the prices may vary
                         from player to player.


 Mayur Milak:            Current prices are holding around Rs 230-235/kg levels. Do we actually see this
                         cost being passed on to the customer?


 Gaurav Kumar:           Unlikely, because we are already reaching the middle of February. Half of the
                         quarter is gone and very little of it has been passed on.


 Mayur Milak:            For the 9 months, what is the total price hike that you have taken till now on
                         all products, in India?


 Gaurav Kumar:           The total price hike that we have taken is of the order of 12-15% across various
                         product categories.


 Mayur Milak:            You said you will be announcing another hike in February?


 Gaurav Kumar:           The quantum and the timing are still under debate. I would not get advance
                         information of that till it gets finalised internally.


 Supriya Mani,
 HSBC Invest Direct:     I want to understand what is our current capacity and what are the capacity
                         utilisation levels we are currently operating on?


 Gaurav Kumar:           The current capacity in India is about 950 tonnes/day. Apollo will be operating
                         somewhere around 85-90% mark. In South Africa, the capacity is around 17
                         tonnes/day and we would be operating maybe in the mid 80s. In Europe the
                         capacity is 150 tonnes/day and we would be operating at full capacity.


 Supriya Mani:           Any capacity enhancement that may happen in the next 2 years?


 Gaurav Kumar:           In India the capacity would go up by 350 tonnes/day on account of Chennai
                         capacity ramp up. Apollo will reach ~1400 tonnes/day in India and in Europe we
                         have undertaken a minor marginal expansion, so the capacity would go up by
                         about 15%, which will be effective in this current quarter itself.


 Supriya Mani:           Okay, what is the capital outlay for that?


 Gaurav Kumar:           For Europe it is outlay of € 7 million.


 Supriya Mani:           And for India?

Q3 FY2011, February 11, 2011                                                            Page 6 of 15
 Gaurav Kumar:           For India the total outlay for the Chennai plant, as we have mentioned before,
                         is Rs 23 billion.


 Supriya Mani:           So no more capex has been planned for that?


 Gaurav Kumar:           No more capex is in plan. Nothing has been committed or firmed up. However,
                         we clearly will have a growth plan and it isn’t as if, after Chennai, Apollo will
                         not look at anything for the next 2-3 years. Further plans will be committed
                         after considering our overall financial position including the balance sheet
                         leverage.


 Supriya Mani:           What is your outlook on the rubber prices currently?


 Gaurav Kumar:           The outlook, being given by all the experts, is that the rubber prices may not
                         come down in the next couple of quarters. Slight softening is expected may be
                         in 6 month’s time; we will not go back to the Rs 100/kg range but, from the
                         current level there may be some softening in 6 month’s time


 Supriya Mani:           Is the price hike, being contemplated, enough to take care of the increase in
                         rubber price, which is continuously on the rise, or do we have to continue to
                         take a hit on EBITDA margin?


 Gaurav Kumar:           Right now there will be a hit on EBITDA margins. The challenge which the
                         industry has faced is that while it takes price increases, it is not even catching
                         up on the previous raw material prices and the raw material prices go up again.
                         We expect the prices to be stable around this level for the next 6 months and
                         then we should catch up. But, there definitely would be a lag of couple of
                         quarters and margin pressure to that extent.


 Supriya Mani:           In that regard, are we expecting anything from the India budget in terms of
                         lower import duty on rubber or higher import duty on imported tyres, so that
                         we can protect our domestic industry?


 Gaurav Kumar:           That has been asked for but we will not pin too much hope on that. Duty being
                         increased on any product is very rare. It goes through a lot of consideration.
                         We have got some relief on rubber. And while there is definitely a case for
                         greater relief given where the rubber prices are, we do not have much hope.


 Supriya Mani:           Do you expect current level of capacity utilisation even going forward in the
                         4th quarter?

Q3 FY2011, February 11, 2011                                                            Page 7 of 15
 Gaurav Kumar:           We will expect the capacity utilisation to go up. India should be at similar
                         level, South Africa would move up.


 Moderator:              The next question is from Chirag Shah from Emkay Global, please go ahead.


 Chirag Shah,
 Emkay Global:           One basic question on NTC and carbon black. What would be your cost for the
                         quarter/kg?


 Gaurav Kumar:           NTC would be Rs 225/kg and carbon black would be Rs 55.


 Chirag Shah:            What would be the cost of putting up cross ply capacity as compared to radial?
                         Will it be lower by ~40% odd?


 Gaurav Kumar:           It will be significantly lower, at about nearly 75%. The reason for this
                         difference is that, nobody is really putting up a large cross ply capacity today.
                         The 2 big markets for cross ply are India and China. China has moved ahead on
                         radialisation and now even in India nobody is going to put up a large cross ply
                         plant; so obviously, the machinery for the same will be available at much more
                         competitive prices. Hence, a comparison of cost of putting up a cross ply plant
                         and a radial plant is not really valid.


 Chirag Shah:            Is there some capacity that you outsource?


 Gaurav Kumar:           We do outsource a certain amount of mixed compounds, tubes and flaps etc.


 Chirag Shah:            What is the kind of increase you are likely to witness in Q4 on rubber?


 Gaurav Kumar:           I will not be able to comment upon this without consulting the Purchase team.
                         But do think there would be a significant increase in rubber prices in Q4.


 Gaurav Kumar:           Rs 185/kg of rubber price pertains to the India operations? Is it not a
                         consolidated cost?


 Gaurav Kumar:           No, it is not a consolidated cost.


 Preeti Trivedi,
 Vantage Securities:     How much of price increase we have done in Africa for this quarter and for 9
                         months?




Q3 FY2011, February 11, 2011                                                           Page 8 of 15
 Gaurav Kumar:           In this quarter we have undertaken a 4% price increase in South Africa and we
                         are considering another price hike.


 Ritu Jain:              We had taken a price increase of 8% in April-May in South Africa.


 Preeti Trivedi:         Total 12% price increase in these 9 months?


 Gaurav Kumar:           That is right. A 12% price increase in the 9 months period.


 Preeti Trivedi:         Can I have the same for Europe?


 Gaurav Kumar:           Europe operations introduced a 4% price increase in May and a similar price
                         increase in October-November.


 Preeti Trivedi:         Is the African operation over with the strike issue and is operational? Or are
                         there still some issues?


 Gaurav Kumar:           The facilities are operational; it was a strike across the entire automotive
                         industry and not specific to Apollo’s South African operations alone.


 Preeti Trivedi:         Okay, since when has it been operational?


 Gaurav Kumar:           It has been fully operational since September.


 Preeti Trivedi:         You mentioned that in the truck replacement market, there was some softness
                         as far as the India operations are concerned. Can you elaborate the industry
                         scenario and the reason for this?


 Gaurav Kumar:           There is no specific reason. I would say that the softness in demand in the last
                         few months was clearly a reflection that the economic growth was not
                         happening at the 8-9% level.


 Preeti Trivedi:         Okay at the same time you mentioned that you are seeing some improvement
                         in the demand?


 Gaurav Kumar:           That is right; from February or towards end of January we have definitely seen
                         an improvement in demand. Though it is still too early to say whether that
                         would continue or not, the signs are much more positive as compared to the
                         last quarter.




Q3 FY2011, February 11, 2011                                                           Page 9 of 15
 Sahil Kedia,
 Enam Securities:        Firstly, I want to understand (a) what would be the utilisations as per your
                         estimates across the industry and (b) given that the capacity utilisation is a
                         little lower than what we have witnessed in the last year, do you believe that
                         tyre companies will lag in price increases even in the next two quarters to get
                         higher volumes?


 Gaurav Kumar:           It is difficult for me to give an industry utilisation figure but, should be in the
                         80s. So far on demand, it has not slumped. It is only that the growth has come
                         down significantly and that too only in the truck area. Price increases have not
                         been as rapid and as large but, still in the order of 10-15%, which is significant.


 Sahil Kedia:            You mentioned in your last earnings call that you would be producing more to
                         catch up on volumes, since your plants were shut in India. Is that the reason
                         why we are seeing a big inventory of about one-and-a-half month of sales?


 Gaurav Kumar:           That is correct. While the production was back to full scale in this quarter,
                         there was some softness in demand. We had lost market share to other players,
                         which can be captured back only gradually. Reclaiming the market share is not
                         an overnight process and that is why the inventory build-up exists.


 Sahil Kedia:            Can you help me understand how your purchasing of rubber has changed
                         resulting in good numbers for you this quarter? I believe earlier it was between
                         2-3 weeks. Has that significantly changed? How is that likely to pan out in the
                         next 2 quarters?


 Gaurav Kumar:           We would have been running at a slightly higher inventory, but more
                         importantly, the Purchase team taking the call would have booked material in
                         advance through imports from Southeast Asia, where quarterly contracts are
                         possible. One of the principal reasons for the price being lower. Not that our
                         inventory levels have gone up dramatically.


 Sahil Kedia:            So what would be the ratio of import to domestic in natural rubber? I guess
                         earlier it was 90-10?


 Gaurav Kumar:           It is likely to be as skewed as 70-30 or 60-40.


 Sahil Kedia:            60 being domestic and 40 being imports?



Q3 FY2011, February 11, 2011                                                            Page 10 of 15
 Gaurav Kumar:           That is correct.


 Sahil Kedia:            Are these contracts, while they may be quarterly, likely to be renewed by end
                         of this quarter or before that?


 Gaurav Kumar:           I will not have this information as of now.


 Sahil Kedia:            I know that Chennai is still ramping up, but are you looking at doing any trial
                         supplies to Apollo Vredestein in Europe from your Chennai facility or selling
                         Apollo tyres in Europe since now there are some spare capacities available?


 Gaurav Kumar:           The spare capacity is predominantly in truck cross ply and this is a market
                         which does not exist in Europe. We have already started selling passenger car
                         tyres in Europe from our Gujarat plant and in the future will also be selling
                         Apollo products from the Chennai plant. The Apollo brand was introduced as a
                         second rung brand in the European market, in June 2010; and over the course
                         of the 2 quarters, the response has been encouraging. It has been introduced in
                         only 4 countries in Europe and the sales are building up. The attempt is that,
                         over a 5-year period, between these 2 plants, Apollo should reach a situation
                         where it requires another dedicated plant for Europe.


 Sahil Kedia:            Any percentage of the total volumes that are specifically supplied to Europe
                         right now? It may be still very small but, just for our understanding.


 Gaurav Kumar:           Right now it is nearly negligible. We would have sold about close to 100,000
                         tyres in Europe; whereas, our total production in India is close to 5 million.


 Moderator:              The next question is from Sangam Iyer from Alfa Accurate Advisors, please go
                         ahead.


 Sangam Iyer,
 Alfa Accurate
 Advisors:               Sir, this is regarding your South Africa operations, which turned profitable with
                         3% EBIT margin. Could you give us some outlook on that operation going
                         forward?


 Gaurav Kumar:           In a normalised scenario, couple of years back, South Africa operations used to
                         function at double digit EBITDA margin and at about 3% net profit margin; and
                         this is the level we will take some time to reach, even if demand comes back,
                         given that the raw material price levels have completely doubled. However, if

Q3 FY2011, February 11, 2011                                                           Page 11 of 15
                         raw materials were to stabilise and demand were to remain strong, we will be
                         back to our levels of double digit EBITDA margins and around 3% odd net profit
                         margin.


 Sangam Iyer:            Do we expect the normalised level, since you said that rubber prices are also
                         expected to be softening in the next 6 months or so, would that be the similar
                         timeframe when we see this margin expansion happening in South Africa as
                         well?


 Gaurav Kumar:           If the expected softness in rubber prices comes through then it will happen.
                         What we are also doing simultaneously is that we are reducing the dependence
                         on the South Africa market and actively looking to grow in various export
                         markets, both in other parts of Africa and Latin America, where we see a lot of
                         potential.


 Sangam Iyer:            On the Europe operations, wherein we saw very strong margin because of
                         seasonality, what is the expectation for Q4?


 Gaurav Kumar:           Margins always tend to go down in the March quarter, so that is a normal
                         phenomenon. I would not be able to predict margins for the March quarter but,
                         margins will also come down given that the revenue will decline.


 Ajay Nandanwar,
 UBS:                    Congratulations on a great quarter. How much is your domestic realisation
                         year-on-year and sequentially?


 Gaurav Kumar:           Year on-year the realisation is up 20%. Sequentially, there has been no
                         movement in the realisation, either upwards or downwards.


 Ajay Nandanwar:         But for your competitors it seems their sequential realisations are by 3-4%?


 Gaurav Kumar:           It would be difficult for me to comment on this.


 Ajay Nandanwar:          Your current pricing would be in line with the December quarter?


 Gaurav Kumar:           Would be similar. As I mentioned, the price increase has hardly been there.
                         Though we’re considering a price increase in February, so there will be a small
                         impact on the March quarter over the December quarter.




Q3 FY2011, February 11, 2011                                                          Page 12 of 15
 Ajay Nandanwar:         What was your tyre cord prices last quarter and same quarter last year and also
                         carbon black?


 Gaurav Kumar:           Tyre cord price last quarter was at Rs 215/kg and carbon black was at Rs
                         55/kg. For the same quarter last year, tyre cord was at Rs 190/kg and carbon
                         black was at Rs 50/kg.


 Ajay Nandanwar:         What is happening on the truck radial imports?


 Gaurav Kumar:           The market share remains at 6%, which was the situation last year. So it has
                         neither gained nor lost any market share in the 9 months of the current year.


 Ajay Nandanwar:         What is happening on truck demand growth? The growth there has been slow?


 Gaurav Kumar:           The truck demand is still up for the year. It is only that last year growth, which
                         was at 15-16%, has come down significantly by more than half. But in terms of
                         absolute growth, the industry has produced 7% more than last year.


 Ajay Nandanwar:         How long does it takes for the market to stabilise again in terms of market
                         share, after the shut down?


 Gaurav Kumar:           Difficult for us to give you an exact timeline on that, but we are back to our
                         normal market share in November and December.


 Ajay Nandanwar:         You mean that is in production or in sales?


 Gaurav Kumar:           In domestic availability, which is calculated as production less exports, without
                         taking into account the inventory impact.


 Tasmai Merchant,
 Pinc Research:          Sir, could you share the consolidated volumes for the quarter?


 Gaurav Kumar:           The consolidated volume is 111,000 tonnes.


 Tasmai Merchant:        Sir, for FY10 could you give me this volume figure?


 Gaurav Kumar:           It is 124,000.


 Tasmai Merchant:        Any update on the Competition Commission in South Africa?


 Gaurav Kumar:           No update there, the situation remains the same.

Q3 FY2011, February 11, 2011                                                           Page 13 of 15
 Johnson Lynn,
 Marshall Wace:          If rubber prices go up another 10% sequentially, how much price increase you
                         need to put up to maintain your margins?


 Gaurav Kumar:           For India operations where the rubber price is close to little under 30% of sales,
                         if the rubber prices go up by 10%, we need a 3% increase in the selling price to
                         counter this cost push.


 Johnson Lynn:           The inventory that you are using in this quarter how much cheaper is it than
                         the last quarter?


 Gaurav Kumar:           I will not have this information with me as of now.


 Johnson Lynn:           The capacity utilisation for your India plants -- I was actually under the
                         impression that it was running at full capacity for the whole industry. So is 85-
                         90% normal or is that a decline?


 Gaurav Kumar:           It is a bit lower, because various players undertook production cuts given the
                         softness in demand. We usually can go up to somewhere between 90-95%.


 Vaishali Jajoo,
 Aegon Religare:         The cash flow is reducing given the demand slowdown, reduction in utilisation
                         levels etc. So what about the investment plans –- will these be postponed if the
                         demand further slows down or will these continue?


 Gaurav Kumar:           For Apollo it is now really quite late to change the investment plans. Most of
                         the capex for the next year, in terms of cash flow, would be committed in
                         various stages and one can postpone maybe about Rs 1-1.5 billion but, bulk of
                         the capex for the Chennai plant has been committed. However, some of the
                         players have reduced the pace of their investments in the current scenario.


 Vaishali Jajoo:         Are we seeing pressure on the balance sheet if the cash flow does not come up?


 Gaurav Kumar:           If it does not come up, what will get impacted is really Apollo’s future growth
                         plan. In a normal scenario, as I mentioned in our previous conversations, we
                         would have really started looking at our next growth plan very actively next
                         year, given that Chennai was reaching full capacity and stabilising, if the
                         balance sheet situation remains where it is. Else, we will slow down in our
                         next growth plan.



Q3 FY2011, February 11, 2011                                                           Page 14 of 15
 Basudeb Banerjee,
 Quant Broking:          You said import from Southeast Asia moved up considerably last quarter. So
                         just wanted to know what was the price difference compared to the domestic
                         cost?


 Gaurav Kumar:           That varies from contract to contract and would depend on the date on which
                         it was booked.


 Basudeb Banerjee:       I am asking this question because last 3-4 months the situation changed
                         dramatically. The global prices were in fact more than domestic prices. So the
                         very question of getting cheaper rubber from global market did not arise.


 Gaurav Kumar:           Your point that in the last couple of months the international prices have
                         moved up significantly is absolutely right. But you need to remember that
                         deliveries of the previous quarter would have been booked earlier. Also, a lot
                         of imports come against export obligation, sometimes also come duty-free
                         which, also impacts the import pricing.


 Bhushan Gajaria:        Thank you to all participants and the management of Apollo. Gaurav would you
                         like to make any closing remarks?


 Gaurav Kumar:           Thank you everyone for being with us and we look forward to speaking with you
                         3 months down the line, with hopefully better news than what everybody is
                         saying on rubber.




 (ends)




Q3 FY2011, February 11, 2011                                                         Page 15 of 15

				
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