Apollo Tyres slides after Q3 PAT falls 50% YoY to Rs 224 cr

Apollo Tyres slipped 1.22% to Rs 222.75 after the company's consolidated net profit dropped 49.6% to Rs 223.54 crore on a 9.9% increase in net sales to Rs 5,707.47 crore in Q3 FY22 over Q3 FY21.

Consolidated profit before tax (PBT) tumbled 50.1% to Rs 306.87 crore in Q3 FY22 from Rs 615.27 crore in Q3 FY21.

Consolidated EBITDA tumbled 28% to Rs 742.90 crore in Q3 FY22 as against Rs 1030.20 crore in Q3 FY21. EBITDA margin stood at 13% in Q3 December 2021 from 19.8% in Q3 December 2020. Profit margin stood at 3.9% in Q3 December 2021 from 8.5% in Q3 December 2020.

The growth across both India & Europe operations driven by sharp execution, price increases and strong volume growth in Europe. The Y-o-Y (year-on-year) decline in operating margins were on the back of steep increase in RM costs, constrained OEM demand and agri demand weakness. However, on a Q-o-Q (quarter-on-quarter) basis, Apollo Tyres saw an improvement in operating margins as continued strong operating performance in Europe negated weakness in India operating performance.

On a standalone basis, net profit slumped 85.3% to Rs 49.19 crore on a 10.9% rise in net sales to Rs 3,791.70 crore in Q3 FY22 over Q3 FY21.

Separately, shares of most tyre manufacturers were under pressure after the Competition Commission of India (CCI) slapped a Rs 1,788-crore fine on five companies for cartelisation. One of the company is Apollo Tyres.

The fair-trade body found that five companies and the Automotive Tyre Manufacturers Association had jointly increased prices of cross-ply variant of tyres sold by each of them in the replacement market and by controlling their production.

In a press release, the CCI stated, "The tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres.

Apollo Tyres is an international tyre major with manufacturing units in India, the Netherlands and Hungary.

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