Apollo Tyres Rides High On Q4 Result, Net Profit Up By 100% To Rs 281.6 Crore

Apollo Tyres engaged in the business of manufacturing and selling of tyres has come out with its Q4 result for the fiscal year 2014 today on May 15, 2014. The result shows that the company has posted a good set of numbers during this quarter.

On consolidated basis the company has posted a topline of Rs 3229.3 crore, reporting a jump of more than 6% on yearly basis for the quarter ended March 2014. The increase in tyre sales in domestic market as well as in Europe helped the company to increase its overall sales during this quarter. The sales from the domestic market, which accounts for about 64% of the total revenue has surged by more than 8% on yearly basis to Rs 2225.7 crore during March quarter 2014. Whereas, the sales in Europe, which accounts for about 30% of the total revenue has surged by 45% on yearly basis standing to Rs 1067 crore during Q4FY14. 

The EBITDA of the company was at Rs 461.2 crore during Q4FY14 against Rs 360.3 crore during Q4FY13 marking a growth of 28% on yearly basis. While on geographic wise, the operating profit from the domestic market has remained at par, whereas operating profit from Europe has surged by 66% on yearly basis during Q4FY14. 

As far as margin is concerned, the EBITDA margin of the company has improved by 243 basis points to 14.28% during Q4FY14 as compared to the same quarter of previous year. The margin of the company improved due to reduction in cost of raw material. The cost of raw material as proportionate to sales has reduced by 14 basis points to 50.2% on yearly basis during Q4FY14. Whereas, the rubber which constitute around 50% of the total cost of raw material has reduced by around 5% during the fourth quarter of FY14 as compared to the same quarter of previous year.

The net profit of the company has increased by around 100% to Rs 281.6 crore during quarter ended March 2014 as compared to the corresponding quarter of previous year. While the net profit margin of the company has increased by 406 basis points standing to 8.7 % during Q4FY14 as compared to corresponding quarter of previous year. The reduction in finance cost (down by 17 % YoY) has helped the net profit margin to increase during this quarter. One noticeable point is that the total debt of the company has reduced to Rs 988.8 crore during Q4FY14 as against Rs 2281.6 crore during Q4FY13. 

On the performance of the company, Onkar S Kanwar, Chairman said, "Last year, we saw the consolidation of our two brands, Apollo and Vredestein, and their entry into newer markets. All this, along with better product and customer mix across geographies, has helped us report incremental revenues."

The company has recommended a dividend of Rs 1 per share for the fiscal year 2014. At current market price of Rs 177.3 the stock of the company is trading at just about 8.8x trailing P/E (price to equity). Today on BSE the scrip opened at Rs 168.8 and closed at Rs 177.3, up by 5.88 % from its previous close.