Revenue from India stood at Rs 2,146.87 crore as against Rs 2,136.57 crore in the year-ago quarter, while that from Europe was at Rs 863.73 crore as compared to Rs 891.55 crore in the year-ago period.

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."

Quarterly Performance

With decline in the rubber prices, the company has witnessed substantial decline in the raw material cost during third quarter ended December 2015. The raw material cost as % of sales net of stock adjustments has declined 260 bps to 45.7%. The employee cost rose 90 bps to 13.6% in Q3 FY 15-16. Other expenses rose 220 bps to 20%. Resultantly, Operating margins improved 90 bps 17.1%. Operating profit rose 2% to Rs 503.6 crore on a y-o-y basis.

Domestic prices of natural rubber, which makes up more than 50% of the cost of a tyre, fell to Rs 110 per kg in November 2015 as against Rs 123 per kg a year ago. Rubber prices had hit multi year lows during FY 15 end on persistent worries about slower economic growth in the main consumer, China, and oversupply.

With 21% drop in other income to Rs 6.79 crore, PBIDT increased by 2% to Rs 510.4 crore. Interest cost fell by 60% to Rs 18.19 crore. Depreciation cost increased by 12% at Rs 104.9 crore. Thus, PBT before EO increased by 7% to Rs 387.35 crore. After nil EO items vis a vis an EO expense of Rs 78 crore in previous year, PBT after EO registered 36% rise to Rs 387.35 crore. After considering 670 bps decrease in the effective tax rate at around 28.3% and 10% rise in tax provision, Net Profit rose 50% at Rs 278.5 crore.

During the quarter, the company earned 63% and 26% of its revenues from India and Europe respectively. Revenues from India were steady. Europe registered 1% drop in revenues.

At the segment front, Indian business witnessed 13% rise in PBIT at Rs 316 crore and constituted 76% of the total segment profit. Segment profit of European operations fell 34% to Rs 99 crore.

Nine Month Performance:

For the first nine months ended December 2015, sales registered 9% decline at Rs 8,784 crore. Operating margins improved 230 bps at 17%. Operating profit rose 5% to Rs 1491 crore on a y-o-y basis. The raw material cost as % of sales net of stock adjustments has declined 430 bps to 46.2%. The employee cost rose 112 bps to 13.5% in 9M FY 15-16. Other expenses was higher by 190 bps at 19.2%.

With 14% drop in other income to Rs 50.33 crore, PBIDT increased by 5% to Rs 1541 crore. Interest cost fell by 54% to Rs 67.69 crore. Depreciation cost was steady at rs 301 crore. Thus, PBT before EO increased by 15% to Rs 1172.44 crore. After an EO income of Rs 47.77 crore accruing from sale of business in South Africa vis a vis an EO expense of Rs 79 crore in previous year, PBT after EO registered 29% rise to Rs 1220 crore. After considering 150 bps increase in the effective tax rate at around 30.5% and 36% rise in tax provision, Net Profit rose 27% at Rs 848 crore.

During the nine-month period, the company earned 66% and 25% of its revenues from India and Europe respectively. Revenues from India fell 3%. Europe registered 12% drop in revenues.

At the segment front, Indian business witnessed 27% rise in PBIT at Rs 1020.5 crore and constituted 82% of the total segment profit. Segment profit of European operations fell 41% to Rs 228 crore.

Pursuant to the share purchase agreement dated November 2015, the company has acquired 100% of Reifencom GmBH, a German tyre retail and distribution company through its wholly owned subsidiary.

The stocks is trading around Rs 150 at BSE currently.