News: Apollo Tyres Q4 net falls 20 percent to Rs 245 crore

The stock of Apollo Tyres on Thursday (May 12, 2016) managed to attain 3.6 percent in the trading, after a poor show in the fourth quarter (March) results that were announced on Wednesday. The gain in the tyre maker’s kitty came only after management’s optimistic remarks.

The year-on-year net revenue came down by 5 percent at INR 2966 crore, while net profit saw a slip of 20 percent at INR 245 crore. Both the approximations were considerably lower than the Bloomberg Commodity (BCOM) Index’s estimate of INR 3058 crore and INR 284 crore correspondingly. Another blip on year-on-year basis was of the 36 basis points drop in operating margins at 16 percent against BCOM’s estimate of 16.81 percent.

The quarter witnessed a decline in the Apollo tyre revenue domestically as well as in its European operations. India operations were hit down by 5 percent, while the European undertakings, which impacted the profits due to change in internal accounting system, saw a decline of 3 percent on year-on-year basis. EBIT (Earnings Before Interest and Taxes) was recorded down to 57 percent at INR 41 crore. Nevertheless, the company stated that this is a one-time hit and will not bother in future.

Increase in the raw material costs and supply concerns along with pricing pressure due to Chinese tyres in the Indian market are the prime reasons for the stock falls of the tyre manufacturing companies in the recent two months, where Apollo Tyres saw a plunge of around 20 percent.

Mr. Prayesh Jain, AVP Research at IIFL indicated that the China-made truck-bus radial import continues to disturb the domestic market, as a result pricing will be under pressure although volumes possibly will stay strong. Hence, in near future, profitability will not remain as intense as witnessed in the recent past.

Author: Ankit verma

My need for speed began at a very early age and I realised this as soon as I got my first bicycle at the age of 8. When all the other kids would break downhill I would pedal harder just to go faster and enjoy the thrill. Adding to my interest for speed, I grew engrossed in the working mechanics of two wheelers thanks to my father as he is a hydraulic mechanic and would take me along with him on his repair sessions. Eventually I became familiar with the tools and basic technical concepts of two wheelers.Super sport and sport tourers are more of my liking and the sparks to these flames were ignited the first time I experienced the maddening power of a Yamaha YZF R1. I was just 14 years old at the time and got to ride as a pillion with an older acquaintance. This one short ride influenced my every decision in terms of the bikes I want to own. As of today I’m 26 years old and a proud owner of a Yamaha Fz15 version 2.0 and a Kawasaki Ninja 650 2014 model having clocked a decent 30k Kms only while touring, waiting to clock 1000s more as riding makes me feel whole again after enduring the dismal routines of life. Read more