BENGALURU (Reuters) – Indian tyre maker Apollo Tyres Ltd. reported a better-than-expected second-quarter profit on Tuesday, boosted by higher auto sales and lower input costs.
Consolidated profit more than doubled to 4.74 billion rupees ($56.94 million) for the quarter ended Sept. 30 from 1.79 billion rupees a year earlier.
Analysts, on average, had expected a profit of almost 4.33 billion rupees, according to LSEG data.
Despite the festival season being pushed to the third fiscal quarter, analysts had anticipated higher realisations from price increases and premiumisation to help revenue growth in the September quarter for autos and auto ancillaries.
The start of the agricultural season will increase demand for replacement tyres in FY24 by high single-digits to low double-digits, analysts said.
Revenue from operations rose over 5% to 62.8 billion rupees, with revenue in the APMEA (Asia Pacific, Middle East and Africa) segment, the largest contributor to revenue, rising 4.5% to 44.73 billion rupees.
The Federation of Automobile Dealers Association said in early October that India’s retail vehicle sales rose 20% in September, with easing monsoon worries and higher rural demand helping sentiment.
Easing crude and rubber prices, key raw materials for tyre makers, helped the company push its cost of raw materials consumed down by more than 15%.
Apollo peers MRF Tyres and Goodyear India also logged profit jumps on the back of higher demand and easing costs.
Shares of Apollo Tyres ended 2.3% lower ahead of the results.
($1 = 83.2450 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Janane Venkatraman)