Apollo Tyres Q1 Consolidated Net Profit Plummets 72% At Rs 88.3 Crore

Indian tyres manufacturer Apollo has recorded 72 per cent decline in its consolidated net profit for the first quarter of ongoing financial year 2017-2018. Apollo Tyres’ net profit stood at Rs 88.3 crore as against Rs 315 crore in the previous fiscal.

For Q1 FY18, the company’s net sales reported was Rs 3258 crore as compared to Rs 3292 crore, thereby experiencing de-growth of 1 per cent.

The first quarter revenue, in India, was subdued because of the pre-GST (goods and services tax) de-stocking by the company’s business partners, and due to the confusion over switch-over from BS III to BS IV emission norms in commercial vehicles, informed the company in a statement.

Its operating profit closed at Rs 282 crore as against Rs 567 crore; posting year-on-year drop of 50 per cent.

Onkar S Kanwar, Chairman, Apollo Tyres Ltd said, “The results reflect the impact of the rising raw material prices on our operations. Raw material prices as a basket has jumped more than 30 per cent in the first quarter, as compared to the same period last year, and has negatively impacted our margins. While, rubber prices have softened to some extent, other raw materials are still on a higher side, which is likely to put our margins under pressure going forward as well. Considering this, we may need to take price corrections.”

“The silver lining for us, is the robust demand from the OEMs and the growing vehicle sales in India, both passenger and commercial, post GST implementation. The recommendation by the Directorate General of Anti-Dumping (DGAD) in India to impose anti-dumping duty on truck-bus radials from China, has vindicated our stand on the same, and which, once implemented, would be a boost for us in India. In Europe, the increased sales reported by most of the vehicle manufacturers in the first half of the calendar year, would also prove to be a positive for us going forward.”