- 16 Aug 2022
- ICICIdirect Research
Apollo Tyres reports healthy Q1FY23 resultsAPOLLOTYRE - 320 Change: 8.40 (2.70 %)
News: Apollo Tyres reported a healthy performance in Q1FY23. Total operating income on consolidated basis stood at Rs 5,942 crores, up 6.5% QoQ. EBITDA for the quarter stood at Rs690 crore with EBITDA margins at 11.6%, up ~40 bps QoQ. Consequent consolidated PAT for Q1FY23 came in at Rs191 crores, up 68% QoQ. Higher PAT was tracking higher than anticipated margins & lower effective tax rate.
View: The company’s performance in terms of sequential revenue growth as well as margin improvement came in as a positive surprise. Gross margin was stable QoQ whereas employee cost was down 58 bps QoQ leading to healthy margins. EBITDA margins on standalone basis stood at 9.7% (up 30 bps QoQ) supported by operating leverage gains amidst gross margin decline of ~96 bps QoQ. We hold a positive view on the company primarily tracking calibrated capex spends amidst focus on b/s health and capital efficiency.