Apollo sales up, profits slip for 2018 fiscal year

Gurgaon, India – Apollo Tyres Ltd has seen its operating profit decline for its full fiscal year 2018, ended 31 March, despite a strong final quarter performance.

In marked contrast with other leading tire makers, the Indian company posted a 22% year-on-year increase in sales for the three months to the end of March, at Rs 3982 crores (€504.7 million).

During the same period, the company reported an operating profit of Rs 559 crores (€71.46 million), up 10% compared to same period last year.

Both, Indian and European operations, said Apollo, “continued with their growth momentum and registered a revenue growth upwards of 20% in the last quarter of the financial year 2017-18.”

This was led by a strong performance in the commercial vehicle segment, especially truck radials, in India, and passenger vehicle category in Europe.

For the full year, the company posted a 12% year-on-year increase in sales at Rs 14674 crores (€1.94 billion).

Operating profit for the full year, however, slipped 11.6% at Rs 1768 crores (€234.23 million), compared to the previous year, mainly as a result of materials price pressure.

“Shortage of a key raw material, and the increasing cost of crude-based raw materials, did pose challenges for us,” explained Onkar S Kanwar, chairman, Apollo Tyres.

Raw material prices, as a basket, went up by more than 10% in the past fiscal, he added.

According to Kanwar, this cost-push is likely to continue going forward, putting pressure on margins.

“On the positive side, considering our capacity expansions in India and Europe, we are looking forward to a healthy growth in our topline,” he concluded.