Quarterly Performance

The company witnessed increase in costduring the quarter ended March 2019 on almost all fronts. The raw material cost (inclusive of purchase of stock in trade) as % of sales net of stock adjustments rose 220bps to 57.1%. The employee cost was steady at 14.8% in Q4FY19. Other expenses rose 40 bps to 17.8%. Resultantly, operating margins fell 290 bps 9.9%. Operating profit fell 18% to Rs 424.63crore on a y-o-y basis.

Average natural rubber (NR) prices which is the key input cost were almost steady over the year during the quarter ended March 2019 on a yearly basis. Prices hovered around Rs 125/Kg during Q4FY19 vis a vis Rs 124/Kg a year ago.

With 17% rise in other income to Rs 48.51crore, PBIDTfell 15% to Rs 473.14crore. Interest cost fell 9%to Rs 43.4 crore. Depreciation cost increased 31% at Rs 231.36crore. Thus, PBT before EOregistered 41% drop to Rs 198.38crore. Following EO loss of Rs 100 crore, PBT after EO fell 71% at Rs 98.38 crore. After considering 1060 bps decrease in the effective tax rate at around 14.61% and 83% drop in tax provision, PAT fell 66% at Rs 84.01 crore.

The Company holds unsecured, short term intercorporate deposit of Rs 2,000 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. The interest accrued and due on this

investment of Rs. 80.33 Million till October 22, 2018 has not been recorded. As a result of increased credit risk in relation to outstanding balances

from IL&FS and the uncertainty prevailing due to the proceedings pending with the NCL T, the entire amount of Rs. 2,000 million has been written

off, of which Rs. 1,000 million was provided for upto December 31, 2018 (Rs, 400 million provided for during quarter ended September 30, 2018

and Rs, 600 million provided for during quarter ended December 31, 2018). The same has been disclosed as an exceptional item in the results.

During the quarter, the company earned 62% and 24% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas)respectively. Revenues from APMEA rose 8%. EA revenues were stagnant. The other segment comprising of other business entities which constitutes 14% of overall revenues, registered 14% drop.

At the segment front, APEMA business witnessed 23% drop in PBIT at Rs 266.53crore and constituted 112% of the total segment profit. Loss from EA operations stood at Rs 46.51 crore. Profit from other segment fell 23% at Rs 18.96 crore.

Full Year Performance:

Topline of Apollo Tyres for FY19 rose 18% at Rs 17548.84 crore. Net profit fell 6% to Rs 679.85 crore. Higher depreciation charges and Rs 200 crore EO expense truncated bottomline growth.

The company witnessed increase in the raw material cost (inclusive of purchase of stock in trade) during FY19. The raw material cost as % of sales net of stock adjustments rose 190 bps to 58.8%. The employee cost fell 70 bps to 13.6% in FY19. Other expenses fell 80 bps to 16.6%. Resultantly, operating margins rose 10 bps 11.2%. Operating profit rose 18% to Rs 1958.69 crore on a y-o-y basis.

With 8% rise in other income to Rs 123.12 crore, PBIDT rose 18% to Rs 2081.8 crore. Interest cost rose 11% to Rs 181 crore. Depreciation cost increased 37% at Rs 812.67 crore. Thus, PBT before EO registered 7% rise to Rs 1088.14 crore. Following Rs 200 crore EO loss, PBT after EO fell 12% to Rs 888.14 crore. After considering 500 bps decrease in the effective tax rate at around 23.45% and 28% drop in tax provision, PAT fell 6% at Rs 679.85 crore.

During FY19, the company earned 58% and 25% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas) respectively. Revenues from APMEA rose 17%. EA registered 14% rise in revenues. The other segment comprising of other business entities which constitutes 17% of overall revenues, registered 28% rise in income.

At the segment front, APEMA business witnessed 16% rise in PBIT at Rs 1144.77 crore and constituted 89% of the total segment profit. Profit from EA operations fell 76% to Rs 28.9 crore. Profit from other segment stood at Rs 106.66 crore, rise of 12%.

The stocks is currently trading around Rs 180 at BSE.