The quarter also witnessed improvement in margins on a y-o-y basis. Both the increased sales and 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.

Quarterly Performance

For the first quarter ended June 2014, the company has reported 2% rise in the total income from operations at Rs 3,247.55 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 360 bps to 52.6%. The employee cost rose 120 bps to 12.9% in Q1 FY 14-15. Other expenses rose by 90 bps to 16.5%. Resultantly, Operating margins improved by just 90 bps 13.2%. Operating profit rose by 9% to Rs 428.7 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 142 per kg, the lowest level in six-eight months. A year back it was around Rs 175.

With huge surge in other income to Rs 29 crore (163% rise), PBIDT increased by 13% to Rs 457.7 crore. Interest cost fell by 27% to Rs 52.96 crore. Depreciation cost increased by 2% at Rs 100.39 crore. Thus, PBT before EO increased by 30% to Rs 304.37 crore. After considering 380 bps decrease in the effective tax rate at 25.11%, Net Profit rose by 37% at Rs 227.95 crore.

During the quarter, the company earned 67%, 5% and 27% of its revenues from India, South Africa and Europe respectively. The figures were 66%, 12% and 22% in the corresponding previous quarter. Revenues from India rose by 7%. Revenues from SA decreased by 59%. Europe registered 31% growth in revenues.

But in terms of profitability growth, it was Europe and India operations that contributed. At the segment front, Indian business witnessed 23% rise in PBIT at Rs 249 crore and constituted 69% of the total segment profit. Segment profit of European operations rose 20% to Rs 106.91 crore. South African business reported profit of just Rs 1.76 crore vis a vis a Rs 18.5 crore in the corresponding previous quarter.

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 Jun 14 vis a vis 43.5% in Mar 14 quarter. Promoters have pledged 4.4% of total shares of the company as against 7.09% a year ago.

• The company announced its earning on 06 August 2014 during market hours. The stock closed 7.1% lower at Rs 171.95 at BSE on that day after hitting a high of Rs 189.9 earlier during the day.