Apollo Tyres Q4 net falls 66 pc on account of Rs 100-cr write-off for IL&FS

Apollo Tyres Thursday reported 66.41 per cent plunge in consolidated net profit at Rs 83.99 crore for the fourth quarter of 2018-19, hit by Rs 100 crore write-off related to IL&FS.

The company has written off Rs 100 crore for the March quarter and a total of Rs 200 crore for the entire 2018-19 fiscal on account of IL&FS issue.

It had posted a net profit of Rs 250.10 for the fourth quarter of 2017-18.

Sales for the period under review stood at Rs 4,176.25 crore. It stood at Rs 3,982.43 crore for the same quarter a year ago, Apollo Tyres said in a statement.

For 2018-19, the company reported a profit of Rs 679.84 crore, down 6.08 per cent from Rs 723.88 crore in 2017-18.

Sales during the last fiscal stood at Rs 17,273.39 crore as against Rs 14,928.95 crore in 2017-18.

"Considering the headwinds, we have managed a healthy volume growth across geographies for the full year, as well as, in the fourth quarter of 2018-19. The bottom line has been impacted, especially in fourth quarter, due to the write-off for IL&FS," Apollo Tyres Chairman Onkar S Kanwar said.

The increase in raw material prices by nearly 10 per cent in fourth quarter also impacted the performance, he added.

"In India, with the green shoots already visible in the replacement market, we are optimistic about the overall sales picking up post the elections; European operations, on the other hand, will continue with its strong performance on the back of increased supplies from Hungary," Kanwar said.

The company said it holds unsecured, short term intercorporate deposit of Rs 200 crore with IL&FS Financial Services. The said deposit was due for maturity on October 22, 2018. However, IL&FS defaulted on the payment.

The interest accrued and due on this investment of Rs 8.03 crore till October 22, 2018 has not been recorded, the company said.

"As a result of increased credit risk in relation to outstanding balances from IL&FS and the uncertainty prevailing due to the proceedings pending with the NCL T, the entire amount of Rs 200 crore has been written off, of which Rs 100 crore was provided for up to December 31, 2018," it added.

Crisis-hit IL&FS Group is under a debt of over Rs 94,000 crore and various entities, including some former officials and auditors, are under the scanner for widespread irregularities and huge loan defaults.

Shares of Apollo Tyres were trading 3.52 per cent down at Rs 185.10 apiece on BSE.