Apollo Tyres maintains revenues, increases profits

Net profit went up 17.5 per cent in the second quarter of Apollo Tyres Ltd’s 2014-15 financial year, the company reported on 10 November. This positive result was achieved despite a slight decrease in net income from operations, and reflects a growth in exports from India and healthy performance in Europe.

Total net income from operations declined 3.5 per cent year-on-year to Rs 33.2 billion (£339.8 million) between 1 July and 30 September. Operating profit increased nine per cent to Rs 5.1 billion (£52.2 million), while operating profit margin increased from 13.7 per cent to 15.4 per cent. Net profit came to Rs 2.6 billion (£26.4 million).

Speaking on the results, company chairman Onkar S Kanwar said: “Our 18-24 months of planning and smart execution has resulted in incremental exports out of India, and with additional demand for our products in the Middle East and ASEAN region, we expect this to grow further. Taking into account the export growth, and the expected revival of the commercial vehicle segment in India, our expansion projects in Chennai and Kochi, both in the southern part of India, is moving ahead full steam.”

Revenues from Apollo’s Indian business rose 6.7 per cent to Rs 22.7 billion (£232.4 million) and it contributed Rs 2.7 billion (£27.6 million) to the company’s bottom line, a result up 20.3 per cent year-on-year and a profit/revenue ratio of 12.1 per cent. European revenues were down 0.6 per cent to Rs 10.5 billion (£107.5 million) and the region contributed Rs 1.4 billion (£14.3 million) to Apollo’s profits, 9.1 per cent more than a year earlier and a profit/revenue ratio of 13.0 per cent. The sale of part of African business in the last fiscal led to the company reporting flat revenue growth on a consolidated level in the second quarter of this fiscal year. Segment revenue for Africa was Rs 1.9 billion (£19.4 million), 49.3 per cent lower year-on-year, while the segment result for the region was down 84.8 per cent to Rs 12.6 million (£129,000).