Apollo Tyres

The company beat all analysts and posted a set of better than expected numbers for Q3FY13. Everyone has expected the topline to be muted and that it has been. Consolidated net sales sequentially rose 5% at Rs.3217 crore but YoY was flat. Domestic sales were bad, down 11% QoQ and 3% on YoY. This was due to sluggish demand in OEMs and a slowdown in replacement market. The 19 days strike at its Vadodara plant also did not help the domestic market. And as against expectation, its South African operations actually turned around, drive by a 9% growth in vehicle sales in 2012. Revenue was up 4% (QoQ) and 6% (YoY)  and the best part was the it posted a small EBIT at Rs.5 crore as against loss of Rs.4 crore in Q2 and Rs.30 crore in Q3FY12. Clearly, its South African market is on the road to recovery.

The company ended the quarter with a net profit at Rs.181 crore, up 19% QoQ and YoY, the jump looks huge at 85%. This was because in Q3FY12, it had an exceptional outgo at Rs.29 crore. But for this loss, the YoY would have been much hefty! The performance has also been helped by a fall in raw material prices and its total operating expenses have also come down. The other income of Rs.27 crore also helped. Its interest outgo remains high; it was at Rs.81 crore for Q3 and till 9MFY13, it was at Rs.239 crore. The good news is that it’s net profit for 9MFY13 at Rs.471 crore has already surpassed that of FY12 which had come in at Rs.410 crore. Clearly, FY13 will end on a high note.