India's Apollo Tyres beats Q2 profit view on higher auto sales

MRF

07/11/2023 14:21

BENGALURU, Nov 7 (Reuters) - Indian tyre maker Apollo
Tyres Ltd.  APLO.NS  reported a better-than-expected
second-quarter profit on Tuesday, boosted by higher auto sales
and lower input costs.
    Consolidated profit more than doubled to 4.74 billion rupees
($56.94 million) for the quarter ended Sept. 30 from 1.79
billion rupees a year earlier.
    Analysts, on average, had expected a profit of almost 4.33
billion rupees, according to LSEG data.
    Despite the festival season being pushed to the third fiscal
quarter, analysts had anticipated higher realisations from price
increases and premiumisation to help revenue growth in the
September quarter for autos and auto ancillaries.
    The start of the agricultural season will increase demand
for replacement tyres in FY24 by high single-digits to low
double-digits, analysts said.
    Revenue from operations rose over 5% to 62.8 billion rupees,
with revenue in the APMEA (Asia Pacific, Middle East and Africa)
segment, the largest contributor to revenue, rising 4.5% to
44.73 billion rupees.
    The Federation of Automobile Dealers Association said in
early October that India's retail vehicle sales rose 20% in
September, with easing monsoon worries and higher rural demand
helping sentiment.
    Easing crude and rubber prices, key raw materials for tyre
makers, helped the company push its cost of raw materials
consumed down by more than 15%.
    Apollo peers MRF Tyres  MRF.NS  and Goodyear India  GDYR.NS 
also logged profit jumps on the back of higher demand and easing
costs.
    Shares of Apollo Tyres ended 2.3% lower ahead of the
results.
   
($1 = 83.2450 Indian rupees)

 (Reporting by Meenakshi Maidas in Bengaluru; Editing by Janane
Venkatraman
)
 ((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))