Apollo Tyres profit up 44%, helped by lower costs

Delaware Court also rejected Cooper's claims of Apollo breaching the merger agreement in the $2.5 bn buyout

Apollo Tyres Ltd, which is in the process of a $2.5-billion buyout of Cooper Tire & Rubber Co said on Monday that its net profit surged by 44% to Rs.219.5 crore for the three months ended September 2013 against the corresponding period last year largely due to operational gains. However, owning to tough macro economic conditions and car sales remaining weak, the company's overall sales increased by 1.74% during the quarter to Rs.3433.4 crore on a yearly basis.

Onkar S Kanwar, chairman of Apollo Tyres Ltd, said that even in the company's largest market of India there is no upswing in the demand from car manufacturers, "the healthy demand in the replacement market, especially for our products, has helped us to hold on to our topline." He added that the company's improved bottomline despite the challenging circumstances is due to its improved product and customer mix across geographies. Kanwar also said that Apollo is planning to introduce the Vredestein brand in India next month.

Meanwhile, in a partial ruling on Friday, the Delaware court rejected claims by Cooper that the Indian company was in breach of its merger agreement to finalise the deal on October 4. The company said in a statement that the Court found that Apollo has used ‘reasonable best efforts’ to negotiate with the USW and that, contrary to Cooper’s claims, ‘nothing in Apollo’s conduct indicates buyer’s remorse.’ "Apollo continues to believe in the merits of the combination and is committed to finding a sensible way forward," it added.  

The deal, announced in June, landed in court last month over charges by the US firm that its Indian suitor was delaying closing the transaction to wrestle down the $2.5 billion offer price.

The company's stock was up 4.05% and closed at Rs.74.50 on the Bombay Stock Exchange on Monday, when the benchmark Sensex closed at 20,490.96 points, down by 0.85%.