The company witnessed huge rise in margins. Rising interest and depreciation charges coupled with big jump in tax provision truncated the bottomlinegrowth to some extent which was otherwise aided by six-fold rise in other income.

Commenting on the results, Onkar S Kanwar, Chairman, Apollo Tyres Ltd said, "All our operations have done well in the past quarter, and have reported a good set of numbers. This is a result of planning and investments in capacities, both in India and Europe, in addition to the increasing demand for our products with the OEMs, as well as, in the replacement market. Going forward, our growth momentum will continue despite the challenges posed by the raw material cost push, transporters strike and the new loading norms for commercial vehicles in India."

Quarterly Performance

The company witnessed decrease in the raw material cost(inclusive of purchase of stock in trade) and all othercost duringfirst quarter ended June 2018. The raw material cost as % of sales net of stock adjustments fell 340 bps to 57.8%. The employee cost fell 34bps to 13.6% in Q1FY19. Other expenses fell 20 bps to 16.6%. Resultantly, operating margins rose 390bps 12.3%. Operating profit rose 92% to Rs 528.1crore on a y-o-y basis.

Average natural rubber (NR) prices which is the key input cost dropped on yoy basis during the quarter ended June 2018. Prices were almost 7% lower over the year and averaged around Rs 123/Kg vis a vis Rs 132/Kg a year ago in Apr-Jun 2017 period. This along with decrease in other cost components helped Apollo Tyres in improving its margins.

With six fold rise in other income to Rs 40.76crore, PBIDT more than doubled to Rs 568.7crore. Interest cost rose 26%to Rs 43.02 crore. Depreciation cost increased 46% at Rs 184.05crore. Thus, PBT registered 180% riseto Rs 341.6crore. After considering 140 bps decrease in the effective tax rate at around 26.28% and 166% rise in tax provision, PAT rose 185% at Rs 251.86 crore.

During the quarter, the company earned 59% and 24% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas)respectively. Revenues from APMEA rose 20%. EA registered 22% rise in revenues. The other segment comprising of other business entities which constitutes 17% of overall revenues, registered 29% rise in income.

At the segment front, APEMA business witnessed 196% rise in PBIT at Rs 338.95 crore and constituted 87% of the total segment profit. Segment profit of EA operations rose 10% to Rs26.72 crore and constituted 7% of segment profit. Profit from other segment stood at Rs22.84 crore, rise of 3%.

The stocks is currently trading around Rs 290 at BSE.