Apollo Tyres shares jump 4% on robust Q2

Shares of Apollo Tyres climbed over 4% in early trade on Wednesday after the company reported healthy financial performance in the September quarter. The net profit surged 2.5 times amid drop in input cost as well as higher demands.

Snapping previous session losses, Apollo Tyres shares opened higher at ₹391, up 1.5% against the previous closing price of ₹385.30 on the BSE. In the early trade so far, the share price of tyre heavyweight gained as much as 3.9% to touch a high of 5.2% to ₹405.25, while the market capitalisation increased to ₹25,610 crore. On the volume front, there was a surge in buying as 3.2 lakh shares changed hands over the counter as compared to a two-week average of 1.35 lakh scrips.

Apollo Tyres shares touched its 52-week high of ₹440.95 on August 4, 2023, and a 52-week low of ₹270.05 on November 18, 2022. The stock has delivered 37% returns in the last one year, while it gained over 23% in the calendar year 2023. In the last six month, the counter rose 7.5%, while it added 9% in a month.

In a post market release on Tuesday, Apollo Tyres released its September quarter results which showed that its consolidated net profit jumped 164% to ₹474 crore in Q2 FY24 as against ₹179 crore in the year-ago period. Sequentially, the profit rose by 19.5% from ₹397 crore in the June quarter of FY24. The profit was driven by ease in crude and rubber prices, which are key raw materials for tyre makers.

The revenue from operations rose 5% to ₹6,280 crore in the September quarter of FY24, as against ₹5,956 crore in the same period last year. Quarter-on-quarter, the revenue was up marginally by 0.5% from ₹6,245 crore in Q1 FY24.

Region-wise, the APMEA (Asia Pacific, Middle East and Africa) market contributed the highest revenue of ₹4,473 crore, followed by ₹1,819 crore from the Europe market.

At the operating level, EBITDA was up 62.9% at ₹1,159.8 crore versus ₹711.9 crore in the corresponding period in the previous fiscal. The EBITDA margin stood at 18.5% as compared to 12% in the same period last fiscal.

During the quarter under review, the total expenses declined marginally to ₹5,613 crore in Q2 FY24, as against ₹5,691 crore in the year ago period and ₹5,725 crore in Q1 FY24.

Apollo Tyres rivals MRF, CEAT, JK, and Goodyear India also clocked strong earnings in Q2 FY24 amid easing costs and higher demand. 

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