India's Apollo Tyres Q1 profit more than doubles on lower costs

JK Tyre & Industries

10/08/2023 14:07

BENGALURU, Aug 10 (Reuters) - India's Apollo Tyres
 APLO.NS  reported a bigger-than-expected rise in quarterly
profit on Thursday, boosted by lower rubber costs and strong
domestic auto sales. 
    The company's consolidated profit more than doubled to 3.97
billion rupees ($48.07 million) in the three months ended June
30 from 1.77 billion rupees a year earlier.
    Analysts, on average, expected a profit of 3.73 billion
rupees, according to Refinitiv IBES data. 
    Rubber prices, a key raw material for the tyre industry,
have fallen by about 20%-25% over the last year through May,
according to HDFC Securities.  
    Apollo's raw materials costs dropped 15.5% during the
quarter, while revenue from operations rose 5.1% to 62.45
billion rupees. 
    Popular utility vehicles and premium motorcycle sales
remained robust during the quarter as high-income consumers
largely shrugged off the impact of inflation. Easing
supply-chain bottlenecks also helped gradually ramp up
production.    
   Indian automakers recorded an increase in passenger vehicle
demand in recent months, aided by demand for new models, while
premium two-wheeler makers reported sales growth on steady urban
demand. 
    Apollo's peers MRF Tyres  MRF.NS , CEAT  CEAT.NS  and JK
Tyres & Industries  JKIN.NS  also logged big profit jumps on the
back of higher demand and easing costs. 
    Apollo Tyre's shares were down 1.6% on Thursday ahead of the
results, after rising about 27% during the April-June quarter. 

($1 = 82.5830 Indian rupees)

 (Reporting by Biplob Kumar Das in Bengaluru; Editing by Sohini
Goswami)
 ((Biplobkumar.das@thomsonreuters.com; 9101861583;))