Commenting on the results, Apollo Tyres Chairman Onkar S Kanwar said "Despite a healthy volume growth in the passenger car tyre segment in Europe and nearly 30% volume growth in the truck-bus radial segment in India, our topline has not grown, primarily due to the South African operations and also because of the depreciation of Euro," "Having said that, the company's effort towards faster market expansion outside India, has resulted in a strong growth of more than 20% in exports," he added.

He said that the recent increase in import duty of natural rubber from 20% to 25% will be a challenge going forward. "This change in duty is likely to result in further increase in import of cheap tyres, which can be imported at 10% duty, and will hinder the growth of capacity investments by the domestic tyre industry, in addition to making us uncompetitive," he added.

AnnualPerformance

With decline in the rubber prices, the company has witnessed substantial decline in the raw material cost. The raw material cost as % of sales net of stock adjustments has declined 250 bps to 50.3%. The employee cost rose 90 bps to 12.6% in FY 14-15. Other expenses rose 100 bps to 17.2%. Resultantly, Operating margins improved by 110 bps 15.1%. Operating profit rose 3% at Rs 1930 crore on a y-o-y basis.

With 45% drop in other income to Rs53.8 crore, PBIDT increased by 1% to Rs 1984 crore. Interest cost fell by 36% to Rs 182.8 crore. Depreciation cost decreased by 5% at Rs 388 crore. Thus, PBT before EO increased by 11% to Rs 1,413 crore. The company incurred an EO expense of Rs 82 crore, a rise of 76%. Thereafter PBT after EO rose 8% at Rs 1330 crore. After considering 810 bps increase in the effective tax rate at 26.54%, Net Profit fell 3% at Rs977 crore.

During the year, the company earned 66%, 3% and 27% of its revenues from India, South Africa and Europe respectively. The figures were 62%, 9% and 26% in the previous year. Revenues from India rose by 2%. Revenues from SA decreased by 63%. Europe registered 3% drop in revenues.

But in terms of profitability growth, it was India operations that contributed. At the segment front, Indian business witnessed 19% rise in PBIT at Rs1106 crore and constituted 69.8% of the total segment profit. Segment profit of European operations fell 10% to Rs497 crore. South African business reported loss of Rs14.8 crore vis a vis a profit of Rs 68.83 crore in the previous year.

Quarterly Performance

For the fourth quarter ended March 2015, the company has reported 3% dropin the total income from operations at Rs 3,117crore. With decline in the rubber prices,the company has witnessedsubstantialdecline in the raw material cost. The raw material cost as % of sales net of stock adjustments has declined190 bps to 48.4%. The employeecost rose 10 bps to 11.8% in Q4 FY 14-15. Other expenses rose by 20 bps to 17.4%. Resultantly, Operating margins improved 230 bps 16.6%. Operating profit rose by 12% to Rs518crore on a y-o-y basis.

For Natural rubber which makes up more than 40% of the cost of a tyre, the local rubber price has fallen to Rs 115 per kg, the lowest level in eight months. A year back it was around Rs 175.

With 132% drop in other income to Rs5.9 crore, PBIDT increased by 7% to Rs512 crore. Interest cost fell by 44% to Rs34.77 crore. Depreciation cost decreased by 14% at Rs87.62 crore. Thus, PBT before EOincreased by 23% to Rs 389.64 crore. The company incurred an EO expense of Rs3.5 crore vis a vis last year's income of Rs 10 crore. Thereafter PBT after EO rose 18% at Rs386 crore. After considering 610 bps increase in the effective tax rate at around 20%, Net Profit rose 9% at Rs307.56 crore.

During the quarter, the company earned 69%, 1% and 26% of its revenues from India, South Africa and Europe respectively. The figures were 64%, 4% and 28% in the corresponding previous quarter. Revenues from Indiafell by 1%. Revenues from SA decreased by 71%. Europe registered 13% drop in revenues.

At the segment front, Indian business witnessed 41% risein PBIT at Rs302.77crore and constituted 74% of the total segment profit. Segment profit of European operations fell 23% to Rs102.91 crore. South African business reportedprofit of Rs6.2 crorevisa vis aprofit of Rs8.2 crore in the corresponding previous quarter.

For the year ended March 2014, the company has reported 5% rise in the total income from operations at Rs 13,412 crore. Net Profit rose by 64% to Rs 1005 crore.

• The promoters' share in the total shareholding stood at 44.06% in March 2015. Promoters have pledged 5.26% of total shares of the company as against 4.1% a year ago.

• The company announced its earning on 12 May 2015. The stock is trading marginally higher at Rs 170.65 at BSE the following day.