Apollo Tyres Q2 Results: Profit Down 37%, Misses Estimates

Apollo Tyres Ltd.'s consolidated net profit declined 37% in the second quarter of the current financial year, missing analysts' estimates.

The company posted a profit of Rs 297.5 crore in the quarter ended September in comparison to Rs 474.3 crore in the year-ago period, according to an exchange filing on Wednesday. Analysts tracked by Bloomberg had a consensus estimate of Rs 352 crore.

Revenue from operations rose 2.5% to Rs 6,437 crore as compared to Rs 6,280 crore in the same period last year. The estimate was Rs 6,428 crore.

On the operating side, earnings before interest, tax, depreciation and amortisation saw a significant decline of 24%, coming in at Rs 878 crore from Rs 1,160 crore. The Bloomberg estimate for the Ebitda was Rs 952 crore.

The company's margin contracted 490 basis points to 13.6% from 18.5% in the year-ago quarter.

In a September note, IIFL Securities Ltd. said it expects compression in margins for the Indian tyre makers to bottom out in the second quarter. "We now expect margins to moderate to sub-normal levels and most likely bottom in 2Q of FY25," analysts said, according to Bloomberg.

Segment Revenue

Income from Asia Pacific, Middle East and Africa business was Rs 4,566 crore in the second quarter, compared to Rs 4,473 crore. Profit fell 49% year-on-year to Rs 345 crore.

On the other hand, Europe saw 19% profit growth at Rs 114 crore. Revenue advanced from Rs 1,816 crore to Rs 1,929 crore.

Apollo Tyres board of directors approved raising of funds by issue of non-convertible debentures of up to Rs 1,000 crore, to be allotted in one or more tranches through a private placement.

Shares of Apollo Tyres closed 3.19% lower at Rs 456.35 on the BSE ahead of the results, compared to a 1.25% decline in the benchmark Sensex.