Apollo Tyres Limited’s standalone net profit nosedived by about 53% in the fourth quarter ended March 2019 due to provisions made towards inter-corporate deposit with IL&FS Financial Services Ltd .
Net profit slid to ₹105.38 crore from ₹223.68 crore in the year-earlier period due to provisioning of ₹100 crore in the fourth quarter.
Apollo Tyres had an unsecured, short term inter-corporate deposit of ₹200 crore with the IL&FS arm. The said deposit was due for maturity on October 22, 2018. The interest accrued and due on this investment is ₹8 crore till October 22, 2019.
As a result of increased credit risk in relation to outstanding balances from IL&FS and the uncertainty prevailing due to the proceedings pending with the NCLT, the entire amount of ₹200 crore had been written off in the last four quarters, the company said.
Revenue from operations during the quarter rose to ₹2,964 crore from ₹2,792 crore.
“Considering the headwinds, we have managed a healthy volume growth across geographies for the full year, as well as, in the fourth quarter. The bottom line has been impacted, especially in Q4, due to the write-off for ILFS, and the raw material prices, as a basket, going up by nearly 10% (in Q4),” said Onkar S. Kanwar, chairman, Apollo Tyres.
In India, with the green shoots already visible in the replacement market, we are optimistic about the overall sales picking up post elections. European operations, on the other hand, would continue with its strong performance on the back of increased supplies from Hungary, he said.
The board recommended a final dividend of ₹3.25 per share. It also sought shareholders’ approval for issue of private placement of non-convertible debentures worth ₹1,500 crore.