In This Article:
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Consolidated Revenue: INR64.4 billion, a growth of 3% over the same quarter last year.
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Consolidated EBITDA: INR8.8 billion, with a margin of 13.6% compared to 14.4% in the previous quarter.
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Net Debt Increase: INR4.6 billion increase in net debt as of September 2024 compared to April 2024.
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Net Debt to EBITDA Ratio: 0.8x for consolidated operations as of September end.
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India Revenue: INR44.6 billion, marginal growth over the same quarter last year.
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India EBITDA: INR5.4 billion, with a margin of 12.1% compared to 13.8% in the previous quarter.
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Net Debt to EBITDA Ratio (India): 1.1x as of September end.
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European Revenue: EUR71 million, slightly up compared to the same period last year, 17% up sequentially.
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European EBITDA: EUR25 million, with an EBITDA margin of 14.8% compared to 14.1% last year and 13.7% in the previous quarter.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Apollo Tyres Ltd (BOM:500877) achieved a consolidated revenue growth of 3% year-over-year, reaching INR64.4 billion.
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The company reported market share gains in domestic passenger car tyres, commercial vehicles, and agri replacement segments.
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European operations showed signs of recovery with a 17% sequential revenue increase and improved EBITDA margins.
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Apollo Tyres Ltd (BOM:500877) has taken proactive pricing actions to counter raw material cost pressures.
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The company continues to focus on premiumization and has secured additional model wins from German PV manufacturers.
Negative Points
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Consolidated operating margin decreased to 13.6% due to raw material cost pressures.
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Net debt increased by INR4.6 billion due to short-term borrowings for inventory financing.
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The OEM segment experienced a double-digit decline, negatively impacting overall growth.
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Other expenses, including freight and advertising costs, remained high, affecting profitability.
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The company faces challenges in maintaining market share in the OE segment and has seen a decline in topline growth compared to peers.
Q & A Highlights
Q: Can you indicate the RM cost increase in India for Q2 and expectations for Q3? Also, what are the current under recoveries? A: The RM cost increased by about 8% sequentially in Q2. We expect a 1%-plus increase for Q3, with RM costs expected to decrease thereafter. The under recovery from last year is about 6%.
Q: What was the volume performance for India in Q2 YoY, and how did export, replacement, and OEM segments perform? A: The volume for Q2 YoY was flattish. Replacement saw mid-single digit growth, exports had double-digit growth, and OEM experienced a double-digit decline.