Apollo sales up in Q3; margins remain under pressure
Net sales at Apollo Tyres increased 36 per cent year-on-year to Rs 32.28 billion (£404.75 million) in the third quarter of the 2011-12 financial year. In the three month period, which ended 31 December 2011, the tyre maker also achieved an operating profit of Rs 3.28 billion (£41.13 million), a rise of 18 per cent. Net profit, at Rs 980 million (£12.29 million), was 18.3 per cent down on the corresponding quarter a year earlier. Breaking net sales down by geographic region, the Indian tyre maker’s domestic operation generated revenue of Rs 20.93 billion (£262.43 million) during the quarter, up 46.2 per cent year-on-year, while European revenue rose 26 per cent to Rs 8.20 billion (£102.78 million) and South Africa revenue grew 28 per cent to Rs 3.83 billion (£48.04 million).
“All three geographies have performed exceptionally well amidst concerns over a slowdown throughout the last two quarters,” commented Apollo Tyres chairman Onkar S Kanwar. “The raw material prices have stabilised to some extent, but they continue to remain on the higher side and put our margins under pressure. In India, our truck‐bus radial journey, which started last year, is in full swing; and with 4,000 truck‐bus radial tyres coming out of our Chennai plant everyday, we have already gained leadership position in this segment as well. I am confident that the next quarter would see us further consolidate our growth and profitability journey.”