Tyremaker Goodyear India's Q2 profit drops on higher raw material costs, weak demand

Goodyear Tire & Rubber

22/10/2024 09:43

Oct 22 (Reuters) - Tyremaker Goodyear India  GDYR.BO  reported a 58.5% fall in second-quarter profit on
Tuesday, hurt by elevated rubber prices and dampened demand.
    The standalone net profit of U.S.-based Goodyear Tire's  GT.O  Indian unit fell to 157.4 million rupees
($1.8 million) for the three months ended Sept. 30, from a year-ago profit of 379.4 million rupees.
    Revenue from operations fell 1.1% to 6.82 billion rupees for the company that supplies tyres to BMW
 BMWG.DE  and Toyota  7203.T , among others.
    
    For further earnings highlights, click (Full Story) 
    
KEY CONTEXT 
    Goodyear India is among the first tyre manufacturers to release its results for the September quarter, when
Indian carmakers' sales to dealers fell for the first time in 10 quarters.
    "Year-over-year profit was lower due to reduction in volume, raw material inflation," the company said in a
statement.
    Analysts noted that international rubber prices saw a sharp uptick, especially in the last two months of
the quarter due to global supply shortage, pushing up domestic rubber prices by 20%.
    Sales of passenger vehicles, including cars and vans, in the September quarter dropped 1.8% year-on-year,
while production dipped 0.7%, industry data showed.
    Bigger rival CEAT  CEAT.NS  reported lower second-quarter profit last week, weighed by higher rubber costs.
    
    
    PEER COMPARISON
                                 Valuation (next   Estimates (next 12  Analysts' sentiment             
                                 12 months)        months)                                             
                      RIC        PE     EV/EBITDA  Revenue   Profit    Mean    No. of   Stock to       Div
                                                   growth    growth    rating  analyst  price          yield
                                                                       *       s        target**       (%)
 Goodyear India        GDYR.BO   NULL   NULL       NULL      NULL      Null    0        NULL           1.36
 CEAT                  CEAT.NS   17.12  8.22       9.92      10.83     Buy     15       0.94           1.01
 MRF                   MRF.NS    25.05  12.21      9.39      5.69      Sell    4        1.12           0.16
 Apollo Tyres          APLO.NS   16.33  8.01       8.21      14.43     Buy     23       0.95           1.18
    
* The mean of analysts' ratings standardised to a scale of "Strong Buy", "Buy", "Hold", "Sell", and "Strong
Sell"
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT


JULY-SEPTEMBER STOCK PERFORMANCE
    
    
    
    
    
    
-- All data from LSEG

-- $1 = 84.0500 Indian rupees
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Goodyear India Q2 and peers performance    https://tmsnrt.rs/48gxa6s
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Meenakshi Maidas in Bengaluru; Editing by Sumana Nandy)
 ((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))