Net profit rose to `88.2 crore in the three months ended 31 March from `72.25 crore in the year-earlier period
Chennai: Subdued rubber prices continued to help Apollo Tyres Ltd, which reported a 22% rise in stand-alone fourth quarter profit, even though fewer tyres were sold in the quarter.
Net profit rose to ₹ 88.2 crore in the three months ended 31 March from ₹ 72.25 crore in the year-earlier period. Net sales fell 9.8% to ₹ 2,036.2 crore.
Analysts had expected a profit of ₹ 82.8 crore, according to a survey by Bloomberg, on expected sales of ₹ 2,240 crore.
“Their margins have expanded by 200 basis points mainly due to low raw material prices, which has led to the rise in profitability," said Yaresh Kothari, an analyst at Angel Broking Ltd.
In the fourth quarter, average domestic natural rubber prices fell 16% to ₹ 160 per kg from a year earlier. Average international rubber prices fell 5% in the same period.
For fiscal year 2013, the tyre maker saw a 4.2% rise in net sales to ₹ 8,507.5 crore and a 72% rise in profit to ₹ 312.5 crore.
“The company has had a better product mix, with the replacement market accounting for 76% of the volumes," said Kothari. “Also, it has helped in better price realization leading to increased profitability."
For Apollo Tyres, commercial vehicle tyres account for 50% of total sales, while 35% comes from passenger cars. With car and commercial vehicle sales still in the doldrums, rubber prices have remained weak, offering temporary respite to tyre makers.
The stock dropped 0.58% to ₹ 94.40 on the BSE Friday, while the benchmark Sensex rose 0.72% to 20,082.62 points.