Top Mutual Funds
- 15 May 2024
- ICICI Securities
-
Share
-
-
-
-
-
APOLLO TYRES POSTED SUBDUED PERFORMANCE IN Q4FY24
APOLLOTYRE - 472 Change: -8.60 (-1.79 %)News: Total operating income on consolidated basis in Q4FY24 stood at ₹ 6,258 crores, flattish YoY. EBITDA for the quarter stood at ₹ 1,028 crore with EBITDA margins at 16.4%, down 190 bps QoQ. Consequent consolidated PAT for Q4FY24 came in at ₹ 354 crores, down 29% on QoQ & 17% on YoY basis. Its overseas operations reported stable 18.4% EBITDA margins while muted show for the quarter was led by subpar performance on standalone basis (largely Indian operations). Company generated healthy CFO at ~₹ 3,940 crore for FY24E with consequent reduction in debt to the tune of ~₹ 1,600 crore.
Views: On standalone basis company reported an EBITDA margin of 15.6%, a decline of 250 bps QoQ. Gross margins declined by 30 bps on QoQ basis while other expenses increased much higher. Higher other expenses were driven by provisions made by the company on account of Extended Producer Responsibility {EPR) for Waste Tyre applicable to Tyre manufacturers and Recyclers. Adjusting for these new provisions still margins were lower by 100 bps QoQ at 17.1%. With OEM volume growth under check especially in the CV and PV space and substantial rise in natural rubber prices (up ~20% in YTDCY24E at ₹ 180/kg) we have a cautious view on the stock. We await management commentary on demand prospects both in domestic and foreign markets & sustenance level of margin trajectory going forward.
Impact: Negative