While Indian operations reported flat revenues, delayed onset of winters in Europe, resulted in lesser than expected sales and pre-orders for winter tyres, adversely impacting the company's European operations. Sales were also impacted by heavy dumping of Chinese tyres into India.

Profit was estimated at Rs 318 crore on revenue of Rs 3,090 crore for the quarter.

Commenting on the results, Apollo Tyres Chairman Onkar S Kanwar said: "Despite the increasing import of truck-bus radials (TBR), which continues unabated into India, we have been able to hold on to our revenues. In the July-September quarter, the truck bus radial (TBR) imports increased almost 100 percent, as compared to the same period last year, of which, the Chinese brands contributed nearly 90 percent'', he added. "The problem of low cost imports is putting at risk the entire 'Make in India' clarion call by the Indian government," Kanwar said.

Quarterly Performance

With decline in the rubber prices, the company has witnessed substantial decline in the raw material cost during second quarter ended September 2015. The raw material cost as % of sales net of stock adjustments has declined 450 bps to 47.3%. The employee cost rose 270 bps to 14.4% in Q2 FY 15-16. Other expenses was steady at 17.9%. Resultantly, Operating margins improved 130 bps 16.1%. Operating profit fell 3% to Rs 482.8 crore on a y-o-y basis.

For Natural rubber which makes up more than 50% of the cost of a tyre, the local rubber price has fallen to Rs 112 per kg in August 2015, the lowest level in a year almost. A year back it was around Rs 140. Rubber prices had hit multi year lows during beginning of April end on persistent worries about slower economic growth in the main consumer, China, and oversupply.

With 6% rise in other income to Rs 18.1 crore, PBIDT decreased by 2% to Rs 500.9 crore. Interest cost fell by 52% to Rs 23.97 crore. Depreciation cost increased by 1% at Rs 107.63 crore. Thus, PBT before EO increased by 4% to Rs 369.26 crore. After an EO income of Rs 47.77 crore accruing from sale of business in South Africa, PBT after EO registered 17% rise to Rs 417.03 crore. After considering 550 bps increase in the effective tax rate at around 33.2% and 40% rise in tax provision, Net Profit rose 8% at Rs 278.73 crore.

During the quarter, the company earned 65% and 23% of its revenues from India and Europe respectively. Revenues from India were steady. Europe registered 19% drop in revenues.

At the segment front, Indian business witnessed 25% rise in PBIT at Rs 342.23 crore and constituted 90% of the total segment profit. Segment profit of European operations fell 68% to Rs 43.62 crore.

Half Year Performance:

For the first half ended September 2015, sales registered 11% decline at Rs 5841.29 crore. Operating margins improved 290 bps 16.9%. Operating profit rose 7% to Rs 985.3 crore on a y-o-y basis. The raw material cost as % of sales net of stock adjustments has declined 560 bps to 46.7%. The employee cost rose 130 bps to 13.5% in H1 FY 15-16. Other expenses was higher by 130 bps at 18.5%.

With 13% drop in other income to Rs 43.54 crore, PBIDT increased by 6% to Rs 1028.9 crore. Interest cost fell by 53% to Rs 48.3 crore. Depreciation cost decreased by 5% at Rs 196.23 crore. Thus, PBT before EO increased by 19% to Rs 784.33 crore. After an EO income of Rs 47.77 crore accruing from sale of business in South Africa, PBT after EO registered 26% rise to Rs 832.1 crore. After considering 510 bps increase in the effective tax rate at around 31.6% and 50% rise in tax provision, Net Profit rose 17% at Rs 569.35 crore.

During the first half period, the company earned 67% and 24% of its revenues from India and Europe respectively. Revenues from India fell 4%. Europe registered 16% drop in revenues.

At the segment front, Indian business witnessed 35% rise in PBIT at Rs 704 crore and constituted 86% of the total segment profit. Segment profit of European operations fell 46% to Rs 129 crore.

• The promoters' share in the total shareholding stood at 44.06% in September 2015. Promoters have pledged 5.24% of total shares of the company as against 3.67% a year ago.

• The company announced its earning on 30 October 2015. The stock is trading 1.7% lower at Rs 168.1 at BSE the following trading day.