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ICICI Direct Report
Apollo Tyres Ltd. reported a relatively healthy operational performance in Q1 FY21 given the circumstances.
Consolidated net sales were down 33.7% YoY (volume-led) at Rs 2,873 crore (Asia Pacific, Middle East and Africa i.e. largely India revenues down 42.1%, Europe revenues down 12%). Ebitda margins at 8.3% were down 490 basis points QoQ.
QoQ margin deterioration was largely due to 407 basis points fall in gross margins although other expenses were controlled, falling 119 basis points QoQ on percentage of sales basis.
APMEA Ebit margins dipped 130 basis points QoQ to 2% while losses in Europe expanded. Consequent consolidated loss after tax came in at Rs 135 crore, accelerated by jump in interest costs (up approximately 101% YoY and approximately 29% QoQ).
The company received first tranche of compulsorily convertible preference shares investment by Emerald Sage amounting to approximately Rs 540 crore, with the second tranche of similar amount set to be received by October 2020.
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