The quarter also witnessed substantial improvement in margins on a y-o-y basis. The increased PBIT came from mainly India and Europe. PBIT would have increased further but for steep decline in profits at the company's South Africa operation.

Apollo Tyres chairman Onkar S Kanwar said: "Our 18-24 months of planning and smart execution has resulted in incremental exports out of India, and with additional demand for our products in the Middle East and ASEAN region, we expect this to grow further. Taking into account the export growth, and the expected revival of the commercial vehicle segment in India, our expansion projects in Chennai and Kochi, both in the southern part of India, is moving ahead full steam. Exports have grown over 30 percent, which has led to a strong performance by the Indian operations. "

Quarterly Performance

For the second quarter ended September 2014, the company has reported 3% drop in the total income from operations at Rs 3,315.25 crore. 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 170 bps to 51.7%. The employee cost rose 40 bps to 12.8% in Q2 FY 14-15. Other expenses rose by 70 bps to 16.5%. Resultantly, Operating margins improved by 170 bps 14.9%. Operating profit rose by 9% to Rs 493.5 crore 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 125 per kg, the lowest level in six-eight months. A year back it was around Rs 165.

With 10% surge in other income to Rs 19.57 rore, PBIDT increased by 9% to Rs 513 crore. Interest cost fell by 34% to Rs 49.61 crore. Depreciation cost increased by 3% at Rs 107.01 crore. Thus, PBT before EO increased by 22% to Rs 356.42 crore. After considering 1200 bps increase in the effective tax rate at 27.63%, Net Profit rose by 18% at Rs 257.94 crore.

During the quarter, the company earned 64%, 5% and 30% of its revenues from India, South Africa and Europe respectively. The figures were 59%, 10% and 29% in the corresponding previous quarter. Revenues from India rose by 7%. Revenues from SA decreased by 49%. Europe registered 1% drop in revenues.

But in terms of profitability growth, it was Europe and India operations that contributed. At the segment front, Indian business witnessed 20% rise in PBIT at Rs 274.22 crore and constituted 67% of the total segment profit. Segment profit of European operations rose 9% to Rs 136.76 crore. South African business reported profit of just Rs 1.26 crore vis a vis a Rs 8.33 crore in the corresponding previous quarter.

Half Yearly Performance

For the first half of 2014-15, the company has logged net profit of Rs 485.8 crore, on net sales of Rs 6,562 crore. While topline fell 1%, net profit surged by 26%. 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 52.1%. The employee cost rose 80 bps to 12.9% in H1 FY 14-15. Other expenses rose by 80 bps to 16.5%. Resultantly, Operating margins improved by 130 bps 14.1%. Operating profit rose by 9% to Rs 922.2 crore on a y-o-y basis.

With 74% surge in other income to Rs 48.55 crore, PBIDT increased by 11% to Rs 970 crore. Interest cost fell by 31% to Rs 102.57 crore. Depreciation cost increased by 2% at Rs 207.41 crore. Thus, PBT before EO increased by 26% to Rs 660.76 crore. After considering 440 bps increase in the effective tax rate at 26.5%, Net Profit rose by 26% at Rs 485.86 crore.

During the first half, the company earned 64%, 5% and 29% of its revenues from India, South Africa and Europe respectively. The figures were 62%, 11% and 26% in the corresponding previous half. Revenues from India rose by 7%. Revenues from SA decreased by 54%. Europe registered 12% rise in revenues.

But in terms of profitability growth, it was Europe and India operations that contributed. At the segment front, Indian business witnessed 22% rise in PBIT at Rs 523.36 crore and constituted 68% of the total segment profit. Segment profit of European operations rose 14% to Rs 244 crore. South African business reported profit of just Rs 3 crore vis a vis a Rs 26 crore in the corresponding previous half.

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 September 14. Promoters have pledged 3.67% of total shares of the company as against 7.7% a year ago.

• The company announced its earning on 10 November 2014. The stock is trading 1.7% lower at Rs 231 at BSE the following day after hitting a high of Rs 239.7 and a low of Rs 228.7 earlier during the day.