Quarterly Performance

The company witnessed increase in the raw material cost(inclusive of purchase of stock in trade) during the quarter ended Dec 2018. The raw material cost as % of sales net of stock adjustments rose 487bps to 60%. The employee cost fell 48bps to 13.41% in Q3FY19. Other expenses fell 290 bps to 15.7%. Resultantly, operating margins fell 110 bps 11.2%. Operating profit rose 6% to Rs 527.26crore on a y-o-y basis.

Average natural rubber (NR) prices which is the key input cost were lower on yoy basis during the quarter ended Dec 2018. Prices hovered between Rs 96/Kg to Rs 105/Kg during 2018 third quarter vis a vis Rs 107/Kg a year ago.

With 28% drop in other income to Rs 33.16crore, PBIDTrose 3% to Rs 560.4crore. Interest cost rose 18%to Rs 48.53 crore. Depreciation cost increased 33% at Rs 201.05crore. Thus, PBT before EOregistered 11% drop to Rs 310.84crore. Following EO loss of Rs 60 crore, PBT after EO fell 28% at Rs 250.84 crore. After considering 880 bps decrease in the effective tax rate at around 21.1% and 50% drop in tax provision, PAT fell 19% at Rs 197.91 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 600 million which has been disclosed as an exceptional item in the results forthe quarter and Rs 100 millions for nine months ended Dec 2018.

During the quarter, the company earned 55% and 28% of its revenues from APMEA (Asia Pacific, Mid East and Africa) and EA (Europe Americas)respectively. Revenues from APMEA rose 17%. EA registered 16% rise in revenues. The other segment comprising of other business entities which constitutes 17% of overall revenues, registered 52% rise in income.

At the segment front, APEMA business witnessed 17% drop in PBIT at Rs 261.45crore and constituted 72% of the total segment profit. Profit from EA operations fell 4% to Rs69.5 crore. Profit from other segment stood at Rs31.26crore, rise of 37%.

Nine month Performance:

Topline of Apollo Tyres for first nine months ended Dec 18 rose 23% at Rs 13263.7 crore. Net profit rose 26% to Rs 595.75 crore.

The company witnessed increase in the raw material cost (inclusive of purchase of stock in trade) during the first nine months ended Dec 18. The raw material cost as % of sales net of stock adjustments rose 140 bps to 59.1%. The employee cost fell 80 bps to 13.4% in 9MFY19. Other expenses fell 130 bps to 16.3%. Resultantly, operating margins rose 100bps 11.5%. Operating profit rose 34% to Rs 1522.61crore on a y-o-y basis.

With 18% rise in other income to Rs 86.02crore, PBIDT rose 33% to Rs 1608.6crore. Interest cost rose 19% to Rs 137.66 crore. Depreciation cost increased 40% at Rs 581.31 crore. Thus, PBT before EOregistered 31% rise to Rs 889.66crore. Following Rs 100 crore EO loss, PBT after EO grew 16% to Rs 789.66 crore. After considering 554 bps decrease in the effective tax rate at around 24.56% and 5% drop in tax provision, PAT rose 26% at Rs 595.75 crore.

During the first nine months, 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 21%. EA registered 18% rise in revenues. The other segment comprising of other business entities which constitutes 18% of overall revenues, registered 44% rise in income.

At the segment front, APEMA business witnessed 37% rise in PBIT at Rs 878.24crore and constituted 84% of the total segment profit. Profit from EA operations fell 21% to Rs 75.4 crore. Profit from other segment stood at Rs87.7crore, rise of 24%.

The stocks is currently trading around Rs 207 at BSE.