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Apollo increases profits in 4Q

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Apollo Tyres Ltd. posted net income of nearly 3.1 billion rupees on net sales of 31.1 billion rupees for its fourth quarter ended March 31, 2015. That compares to income of 2.8 billion rupees on sales of 32.3 billion rupees for the same period 12 months prior.

Based on the exchange rate on March 31, 2015, Apollo recorded net income of $49.1 million on net sales of nearly $500 million for 4Q 2015. The company’s income-to-sales ratio was 9.8%.

For its fiscal year ended March 31, 2015, Apollo posted net income of nearly 9.8 billion rupees ($158.3 million) on net sales of 127.8 billion rupees ($2 billion). That compares to income of 10 billion rupees on sales of 134.1 billion rupees for fiscal 2014.

“Despite a healthy volume growth in the passenger car tire segment in Europe, and nearly 30% volume growth in the truck-bus radial segment in India, our topline has not grown, primarily due to the South African operations, and also because of the depreciation of Euro,” says Chairman Onkar S Kanwar.

“Having said that, our effort towards faster market expansion outside India, has resulted in a strong growth of more than 20% in exports out of India.”

The recent increase in the Indian import duty of natural rubber from 20% to 25% will be a challenge going forward, according to Kanwar.

“This change in duty is likely to result in further increase in import of cheap tires into the country, which can be imported at 10% duty, and will hinder the growth of capacity investments by the domestic tire industry, in addition to making us uncompetitive.”

Apollo’s board of directors recommended a dividend payout of 200%, to be approved by the shareholders at the forthcoming Annual General Meeting, later in the year.

For a look at third-quarter results, click here.

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