Quarterly Performance

The company witnessed increase in the raw material cost(inclusive of purchase of stock in trade) during the quarter ended Sept2018. The raw material cost as % of sales net of stock adjustments rose 220 bps to 59.5%. The employee cost fell 150bps to 13.3% in Q2FY19. Other expenses fell 70 bps to 16.7%. Resultantly, operating margins rose 50bps 11%. Operating profit rose 28% to Rs 467.23crore on a y-o-y basis.

Average natural rubber (NR) prices which is the key input cost were almost steady on yoy basis during the quarter ended Sept 2018. Prices hovered between Rs 126/Kg to Rs 130/Kg during 2018 second quarter vis a vis Rs 128/Kg a year ago.

With 38% drop in other income to Rs 12.3crore, PBIDTrose 25% to Rs 479.53crore. Interest cost rose 15%to Rs 46.1 crore. Depreciation cost increased 46% at Rs 192.crore. Thus, PBT before EOregistered 15% riseto Rs 237.23crore. Following EO loss of Rs 40 crore, PBT after EO fell 4% at Rs 197.23 crore. After considering 580 bps decrease in the effective tax rate at around 25.96% and 21% drop in tax provision, PAT rose 4% at Rs 146.03 crore.

The Company holds unsecured, short term intercorporate deposit of Rs, 2,000.00 million with IL&FS Financial Services ltd ("IL&FS"). The said

deposit was due for maturity on October 22, 2018, however, IL&FS has defaulted on its repayment.In light of the above, the Company has recorded a provision of Rs 400.00 million which has been disclosed as an exceptional item in the results forthe quarter and half year ended September 30, 2018.

During the quarter, the company earned 59% and 22% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas)respectively. Revenues from APMEA rose 25%. EA registered 17% rise in revenues. The other segment comprising of other business entities which constitutes 19% of overall revenues, registered 52% rise in income.

At the segment front, APEMA business witnessed 32% rise in PBIT at Rs 277.83crore and constituted 96% of the total segment profit. Loss from EA operations rose three-foldto Rs21.02 crore. Profit from other segment stood at Rs33.59crore, rise of 31%.

Half Year Performance:

Topline of Apollo Tyres for first half ended Sept 18 rose 26% at Rs 8545 crore. Net profit rose 74% to Rs 397.82 crore.

The company witnessed decrease in the raw material cost (inclusive of purchase of stock in trade) during the first half ended Sept 2018. The raw material cost as % of sales net of stock adjustments fell 50 bps to 58.7%. The employee cost fell 90 bps to 13.4% in H1FY19. Other expenses fell 40 bps to 16.7%. Resultantly, operating margins rose 210bps 11.6%. Operating profit rose 56% to Rs 995.33crore on a y-o-y basis.

With 100% rise in other income to Rs 52.86 crore, PBIDT rose 57% to Rs 1048.2crore. Interest cost rose 20% to Rs 89.13 crore. Depreciation cost increased 44% at Rs 380.26 crore. Thus, PBT before EOregistered 77% rise to Rs 578.8crore. Following Rs 40 crore EO loss, PBT after EO grew 65% to Rs 538.8 crore. After considering 407 bps decrease in the effective tax rate at around 26.17% and 42% risein tax provision, PAT rose 74% at Rs 397.82 crore.

During the first half, the company earned 59% and 23% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas) respectively. Revenues from APMEA rose 23%. EA registered 20% rise in revenues. The other segment comprising of other business entities which constitutes 18% of overall revenues, registered 40% rise in income.

At the segment front, APEMA business witnessed 90% rise in PBIT at Rs 616.78crore and constituted 91% of the total segment profit. Profit from EA operations fell 75% to Rs 5.9 crore. Profit from other segment stood at Rs56.44crore, rise of 18%.

The stocks is currently trading around Rs 227 at BSE.