Chennai: Apollo Tyres Ltd on Wednesday said net profit for the January-March quarter fell 20.27% due to a slowdown in the truck and bus radial segment and competition from cheaper Chinese imports.
India’s second-largest tyre maker posted a net profit ofRs.245.16 crore during the quarter, down from Rs.310 crore a year ago, falling short of Rs.284.5 crore forecast in aBloomberg poll of 15 analysts.
Net sales were down to Rs.2,966 crore, against Bloombergestimates of Rs.3,057.9 crore. The company posted sales ofRs.3,130 crore a year ago.
“Our European operations have been impacted due to the SAP (Systems, Applications & Products) implementation. Having said that, we are confident that the team would be able to resolve the challenges very soon. With the addition of Reifen.com, we are looking at maximising on the new business vertical. We believe that there is a huge potential in further developing this business model across geographies.” said Onkar S. Kanwar, chairman, Apollo Tyres.
In November, the company acquired Reifencom GmbH, a Germany-based tyre distributor.
Operating profitability or Ebitda (earnings before interest, taxes, depreciation and amortization) was down 7.5% toRs.478 crore.
Apollo tyres, which is hoping the government will take action on tyre dumping by China, is also “looking forward to good monsoon which will boost the commercial tyre segment.”
The company’s board has recommended the final dividend at the rate of Rs.2 per equity share of Rs.1 each for the year.
On Wednesday, Apollo Tyres closed at Rs.153.40, up 0.69% on the BSE, while the benchmark index Sensex fell 0.68% to close at 25,597.02 points.