This leading tyre manufacturing company posted a very good set of results for the second quarter ended 30th September 2009. On a consolidated basis, net sales rose 62.12% at Rs.2046.19 crore and net profit was up by 755.33% on YoY at Rs.129.2 4crore.
On a standalone basis, net profit shot up by an unbelievable1209% to Rs 102.1 crore versus Rs.7.8 crore on a YoY. Comparing on a YOY is not all that a true representation of the picture as last September, the recession had set in and hence the base effect would be lower. On a QoQ, net sales was up 3% and net profit was up 8%. So in the true sense, the company has maintained its performance.
Growth in volumes and growth in the passenger radial car helped boost the performance. The recovery in the auto sector is truly being reflected in the performance of Apollo. Its market share in radial tyres currently stands at 25%.
The company, after deferring its plan to set up a greenfield project at Hungary, instead acquired a Dutch company and that gives the company a ready market to tap in East Europe. It is now working full throttle in setting up a Greenfield project in Chennai and this is expected to get on stream by December 09’.
The going is expected to get better. Though raw material costs are expected to go up in the coming months, the company is hopeful of offsetting the rise in cost by rising volumes. Its main raw material is natural rubber and it is currently at an all time high of around Rs 108-110. To offset this, it has also hiked prices by 3% in October.
The company, over the next 3-4 years hopes to make a name for itself amongst the top 10 global tyre companies of the world.
On a standalone basis, net profit shot up by an unbelievable1209% to Rs 102.1 crore versus Rs.7.8 crore on a YoY. Comparing on a YOY is not all that a true representation of the picture as last September, the recession had set in and hence the base effect would be lower. On a QoQ, net sales was up 3% and net profit was up 8%. So in the true sense, the company has maintained its performance.
Growth in volumes and growth in the passenger radial car helped boost the performance. The recovery in the auto sector is truly being reflected in the performance of Apollo. Its market share in radial tyres currently stands at 25%.
The company, after deferring its plan to set up a greenfield project at Hungary, instead acquired a Dutch company and that gives the company a ready market to tap in East Europe. It is now working full throttle in setting up a Greenfield project in Chennai and this is expected to get on stream by December 09’.
The going is expected to get better. Though raw material costs are expected to go up in the coming months, the company is hopeful of offsetting the rise in cost by rising volumes. Its main raw material is natural rubber and it is currently at an all time high of around Rs 108-110. To offset this, it has also hiked prices by 3% in October.
The company, over the next 3-4 years hopes to make a name for itself amongst the top 10 global tyre companies of the world.
Source: Internet (www.premiuminvestments.in by S P Tulsian)
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