Despite an 11% increase in sales, Apollo Tyres Ltd.’s second-quarter net profit dropped by 46% year-over-year.
The company posted net income of 1.4 billion rupees on net sales of nearly 34.2 billion rupees for the second quarter ended Sept. 30, 2017.
That compares to net income of 2.6 billion rupees on net sales of 32.9 billion rupees in the year-ago quarter.
Based on the exchange rate, Apollo recorded net income $21.4 million on net sales of $52.1 billion for the second quarter of its 2017-18 fiscal year. The company’s income-to-sales ratio was 4.1%.
The company said its Indian operations, which reported an 18% increase in net sales, was the dominant contributor to revenue growth in the second quarter. The company’s net sales rose 11% in the second quarter.
The company overcame price hikes in raw material prices to grow revenues, according to Apollo Chairman Onkar S Kanwar. “While our revenues have grown, our margins have been under pressure due to the higher raw material prices, up nearly 15% vs Q2 last year. With several capacity expansion projects currently underway for the company, we are looking forward to a healthy growth in the coming quarters.”
For the first half of the year (April – September), the company posted net income of 2.3 billion rupees on net sales of nearly 66.8 billion rupees.