Report 24/NOV/2014. Ambitions die hard. For the father-son Kanwar duo at Apollo Tyres, even the 38% fall in share prices between June and December 2013, as investors severely criticised its decision to mount a $2.5 billion bid to acquire Cooper Tire, couldn\'t kill their drive. The deal, which misfired spectacularly, was called off on December 30, 2013. The next day, at a meeting attended by the entire senior management, the company revved up another growth engine investments in building new global factories. It decided to put up a new plant in Hungary at an investment of Rs 4,750 crore. This will be the company\'s first greenfield plant outside India and will have the largest capacity of over 12 million car, truck and heavy vehicle tyres. \"We were not going to stop because the inorganic expansion didn\'t materialise; and we had to reach our vision, so immediately focused our attention to plan B for organic growth,\" says Neeraj Kanwar, vice chairman and managing director, Apollo Tyres. Adds chairman Onkar Kanwar: \"This doesn\'t mean we are closed to inorganic expansion; we are still open to it and will look at any new opportunity.\"
Later, in July this year, Apollo TyresBSE -3.57 % also announced another Rs 2,000 crore investment in its factories in Chennai and Kerala. One would have expected a momentary pause at least, to recover from the Cooper fiasco. But not for the Kanwars. They were hungry for growth and had the money to fund it the company would turn in a Rs 1,000 crore net profit during FY14. If their first shot at scaling $6 billion in revenues with the Cooper deal backfired, their immediate second go seems to be faring better. The goal though is still a long way away; Apollo\'s revenues were still only $2.2 billion in FY14.
The Apollo Tyres stock has almost tripled in value to Rs 226 in the past 12 months, outperforming the BSE Sensex, which gained approximately 40% in the same period. Back in December 2013, arguably one of the lowest points in the Kanwars\' 38-year journey in making tyres, no one would have bet on the stock gaining so much. Other tyre stocks have also gained significantly in the same period; some even more than Apollo Tyres. Apollo\'s strong comeback in the stock market suggests that after a disastrous 2013, the company has got its mojo back this year. Question is: how did the Kanwars manoeuvre such a sharp turnaround?