Small BusinessApollo Tyres Q3 net zooms over 18 times on topline growth
Apollo Tyres today reported an over 18-fold jump in net profit for its Indian operations during the quarter ended December 31, 2009, at Rs 102.03 crore, mainly due to robust growth in topline.
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The tyre manufacturer had posted a mere Rs 5.51 crore net profit in the corresponding period last financial year.
The company"s total income soared by 46.52 per cent to Rs 1,323.43 crore during the third quarter from Rs 903.26 crore in the year-ago period.
"Last fiscal"s third quarter was the worst for all of us in the industry... The robust jump in net profit was mainly because of sharp topline growth," Apollo Tyres Chief Financial Officer Sunam Sarkar told PTI.
The company is expecting to continue similar growth in its income during the current quarter too, although its margins are under pressure on a rise in raw material prices, he added.
"In the last six months, rubber prices have shot up by 15 per cent and we have raised prices by only 5 per cent... It is putting pressure," Sarkar said.
He further said there is room for further increase in prices for the various tyres manufactured by the company, but declined to give details.
When asked about Apollo Tyres" outlook for the entire fiscal, Sarkar said it is expecting to close 2009-10 with a consolidated income of Rs 8,000 crore. The company"s consolidated net sales for the first three quarters stands at Rs 5,977.41 crore.
The company is currently investing about Rs 2,000 crore in setting up a greenfield facility near Chennai. The production is expected to start by next month.
"At present our production capacity stands at 950 tonnes a day. With operationalisation of the new plant, we will add 400 tonnes of tyre production every day," Sarkar said, adding the Chennai facility would roll out 6,000 units of truck radials and 8,000 units of car radials daily.
Besides, the company would start exporting tyres to Saudi Arabia and Australia during this quarter, he said.