Apollo Tyres Ltd. reported annual revenue of Rs 127 billion (approx. $2 billion USD) and a net profit of Rs 9.8 billion (approx. $150 million USD) for the financial year 2014-15.
These numbers matched Apollo’s 2013-14 numbers. The company reported no increase in net sales year-over-year, a slight increase in operating profit from Rs. 19.7 billion (approx. $310 million USD) and a slight decrease in net profit from Rs 10 billion last year (approx. $160 million USD).
“Despite a healthy volume growth in the passenger car tire segment in Europe, and nearly 30% volume growth in the truck-bus radial segment in India, our topline has not grown, primarily due to the South African operations, and also because of the depreciation of Euro,” said Onkar Kanwar, chairman of Apollo Tyres. “Having said that, our effort towards faster market expansion outside India, has resulted in a strong growth of more than 20% in exports out of India.”
The tiremaker reported, on a consolidated level, the company’s percentage of revenues across geographies were 65% from India, 28% from Europe, and 7% from “other geographies.” Last month, Apollo’s vice chairman and managing director said the company needs to “go to new continents,” although he does not see India’s contribution to Apollo falling below 50%.
Kanwar and the company, however, are concerned about competition and regulations in India.
“The recent increase in import duty of natural rubber from 20% to 25% in India will be a challenge going forward,” Kanwar added. “This change in duty is likely to result in further increase in import of cheap tires into the country, which can be imported at 10% duty, and will hinder the growth of capacity investments by the domestic tire industry, in addition to making us uncompetitive.”
Based on the results of the year, Apollo’s board of directors recommended a dividend payout of 200% to be approved by the shareholders at the company’s annual general meeting, which will be hosted later this year.
