Improved and expanded product range in key markets for the company has helped the company in reporting incremental revenues for the year. The year also witnessed good improvement in margins on a y-o-y basis. While the increased sales came from mainly Europe, increase in PBIT came from Europe, South Africa and India for the year.

Annual Performance

For the year ended March 2014, the company has reported 5% rise in the total income from operations at Rs 13,412 crore.

For the year, the raw material cost as % of sales net of stock adjustments has declined 470 bps to 52.8% due to lower rubber cost. The employee cost rose 155 bps to 12 % in FY 13-14. Other expenses rose by 144 bps to 16%. Resultantly, Operating margins improved by 260 bps 14%. Operating profit rose by 28% to Rs 1875.5 crore on a y-o-y basis.

Thinning offtake by consumer industries like tyre giants and the phenomenal surge in imports have been sitting heavy on the NR price. The price of RSS-4 grade had been Rs192 per kg during July 2013. Prices have fallen by 21% since then.

With 8% rise in other income to Rs 97.84 crore, PBIDT increased by 27% to Rs 1973.4 crore. Interest cost fell by 9% to Rs 283.8 crore. Depreciation cost increased by 4% at Rs 410.85 crore. Thus, PBT before EO increased by 52% to Rs 1258 crore. The company incurred an EO expense of Rs 46.78 crore during the period on account of expenses in connection with propped acquisition of Cooper Tire and Rubber which was terminated by the later (vis a vis EO income of Rs 16.9 crore). PBT after EO thereafter rose by 43% at Rs 1232 crore. After considering 1000 bps decrease in the effective tax rate at 18.4% (7% drop in tax provison), Net Profit rose by 64% to Rs 1005 crore.

During the year, the company earned 62%, 9% and 28% of its revenues from India, South Africa and Europe respectively. The figures were 65%, 11% and 23% in the previous year. Revenues from India rose by 3%. Revenues from SA fell by 16%. Europe registered 31% growth in revenues.

But in terms of profitability growth, it was India, Europe and SA operations that contributed. At the segment front, Indian business has reported 26% jump in the PBIT at Rs 930 crore and constituted 60% of the total segment profit. But segment profit of European operations rose 29% to Rs 557 crore. South African operation was back at profits registering profit of Rs 68.8 crore visi a vis a loss of Rs 18.25 crore in previous year.

Quarterly Performance

For the fourth quarter ended Mar 2014, the company has reported 6% rise in the total income from operations at Rs 3,229 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 250 bps to 50.3%. The employee cost fell 100 bps to 11.9% in Q4 FY 13-14. Other expenses fell by 70 bps to 16.9%. Resultantly, Operating margins improved by just 250 bps 14.3%. Operating profit rose by 28% to Rs 461.2 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 145 per kg, the lowest level in six-eight months. Six months back it was around Rs 195.

With 53% drop in other income to Rs 18.6 crore, PBIDT increased by 20% to Rs 479.8 crore. Interest cost fell by 17% to Rs 61.61 crore. Depreciation cost decreased by 15% at Rs 102.08 crore. Thus, PBT before EO increased by 54% to Rs 316.1 crore. The company incurred an EO expense of Rs 10.97 crore during the quarter on account of expenses in connection with propped acquisition of Cooper Tire and Rubber which was terminated by the later. PBT after EO thereafter rose by 47% at Rs 327 crore. After considering 2300 bps decrease in the effective tax rate at 13.9%, Net Profit doubled at Rs 281 crore.

During the quarter, the company earned 64%, 4% and 31% of its revenues from India, South Africa and Europe respectively. The figures were 66%, 10% and 23% in the corresponding previous quarter. Revenues from India rose by 8%. Revenues from SA decreased by 53%. Europe registered 45% growth in revenues.

But in terms of profitability growth, it was Europe and SA operations that contributed. At the segment front, Indian business witnessed steady PBIT at Rs 215 crore and constituted 59% of the total segment profit. Segment profit of European operations rose 66% to Rs 142 crore. South African business reported profit of Rs 8.2 crore vis a vis a loss of Rs 24.9 crore in the corresponding previous quarter.

• The promoters' share in the total shareholding stood unchanged at 43.5% in Mar 14. Promoters have pledged 4.09% of total shares of the company as against 7.08% a year ago.

• The company announced its earning on 15 May 2014. The stock is currently marginally trading higher at Rs 178 at BSE on 16 May 2014 after hitting a high of Rs 184.95 earlier during the day.