BENGALURU (Reuters) – India’s Apollo Tyres reported a bigger-than-expected rise in quarterly profit on Thursday, boosted by lower rubber costs and strong domestic auto sales.
The company’s consolidated profit more than doubled to 3.97 billion rupees ($48.07 million) in the three months ended June 30 from 1.77 billion rupees a year earlier.
Analysts, on average, expected a profit of 3.73 billion rupees, according to Refinitiv IBES data.
Rubber prices, a key raw material for the tyre industry, have fallen by about 20%-25% over the last year through May, according to HDFC Securities.
Apollo’s raw materials costs dropped 15.5% during the quarter, while revenue from operations rose 5.1% to 62.45 billion rupees.
Popular utility vehicles and premium motorcycle sales remained robust during the quarter as high-income consumers largely shrugged off the impact of inflation. Easing supply-chain bottlenecks also helped gradually ramp up production.
Indian automakers recorded an increase in passenger vehicle demand in recent months, aided by demand for new models, while premium two-wheeler makers reported sales growth on steady urban demand.
Apollo’s peers MRF Tyres, CEAT and JK Tyres & Industries also logged big profit jumps on the back of higher demand and easing costs.
Apollo Tyre’s shares were down 1.6% on Thursday ahead of the results, after rising about 27% during the April-June quarter.
($1 = 82.5830 Indian rupees)
(Reporting by Biplob Kumar Das in Bengaluru; Editing by Sohini Goswami)