Apollo Tyres net profit up 52 per cent: stock surges 10 per cent

Apollo Tyres announced its nine month ending quarterly result on Wednesday. It is one of the leading tyre manufacturers in India. It also announced appointment of former comptroller and auditor general (CAG) Vinod Rai and ex-CEO of Pirelli Tyres, Francesco Gori to its Board of Directors.

On financial front, the net revenue from operations of Apollo Tyres reached Rs 2943 crores in Q3FY16 compared to Rs 3105 crores in Q3FY15, a decrease of 5.22 per cent YoY. The EBITDA stands at Rs 506 crores this quarter compared to Rs 491 crores in Q3FY15, an increase of 3.08 per cent YoY. The EBITDA margin of company stands at 17.18 per cent this quarter compared to 15.80 per cent in Q3FY15. The net profit stands at Rs 280 crores in Q3FY16 compared to Rs 184 crores in Q3FY15, an increase of 51.72 per cent YoY. 

Apollo Tyres' bottom line was boosted by falling raw material costs and strong sales in Europe. The consumption of raw material decreased by 11.58 per cent to Rs 1346 crores compared to Rs 1522 crores for the same period last year. Revenues from Europe division, which contributes nearly 10 per cent to Apollo Tyres revenue, nearly doubled to Rs 361 crore.

The nine month ending net revenue from operations decreased by 8.80 per cent and reached Rs 8784 crores compared to Rs 9632 crores for the same period last year. The net profit for nine month period stands at Rs 848 crores compared to Rs 670 crores for the same period last year, an increase of 26.56 per cent YoY. 

Commenting on the performance, Apollo Tyres chairman Onkar S Kanwar said: "Despite our volumes going up, especially in India, we have reported flat revenues, as we have passed on the benefit of cooling raw material prices to our customers. This, in addition to the increasing import of cheap tyres into the country, has impacted our revenues." 

On valuation front the stock of company is trading at the trailing twelve month (TTM) P/E of 7.09 compared to industry P/E of 9.43. The stock of company is trading at Rs 149.15 on Wednesday, an increase of 10.44 per cent from previous close.