Apollo Tyres Ltd.'s profit fell in the three months ended March as a steep rise in rubber prices in the first half of the quarter hurt margins.
The consolidated net profit of the tyre-maker fell 16 percent to Rs 228 crore over the year-ago quarter. Its operating margins contracted by nearly 5 percentage points, according to its stock exchange filing.
The benchmark rubber futures in Bangkok rose more than 85 percent from September to its last peak in February end. January floods in that country also aided the spike in the prices of rubber. Apollo Tyres' raw materials costs rose 29 percent to Rs 1,739 crore in the March quarter.
The company's operating income fell 25 percent to Rs 370 crore year-on-year. Its revenue jumped almost 10 percent to Rs 3,589 crore on the back of new tyre stock rolling out of the company's Hungarian plant, its second in Europe after the one in the Netherlands.
The board of directors also recommended a dividend of Rs 3 per share of face value of Re 1 each, subject to shareholder approval.
Shares of Apollo Tyres closed 1.49 percent higher on Friday compared to a 0.8 percent fall in the benchmark Nifty 50 Index.
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