08-Nov-2023
2 mins read
Apollo Tyres has delivered a stellar performance in the second quarter, with profits soaring by an impressive 164 per cent. This remarkable upswing has led to a nearly 4 per cent surge in the company’s share prices in early trading on November 8. Investors have responded quickly to the robust earnings report, with Apollo Tyres’ stock reaching Rs 397.24 on the National Stock Exchange (NSE) at the opening bell.
Material Costs Down, Profits Up
The key driver behind Apollo Tyres’ extraordinary profit growth is the significant reduction in input costs. The consolidated profit for the quarter ending September FY24 stood at Rs 474.3 crore, a hefty leap from the previous year. With the cost of materials needed for tyre production taking a dip, the company has capitalized on the opportunity to boost its bottom line.
Revenue Growth on the Right Track
Apollo Tyres isn’t just excelling in profit margins; the company’s revenue from operations also witnessed a commendable increase of 5.4 per cent year-over-year, reaching a figure of Rs 6,280 crore. This growth indicates a positive market reception and increasing demand, particularly highlighted by Chairman Onkar Kanwar, who emphasized the positive trends and the company’s focus on profitable growth aligned with its long-term vision.
Market Experts Weigh In
Market analysts have taken note of Apollo Tyres’ financial health, with Motilal Oswal stamping a ‘buy’ rating on the stock. The brokerage firm’s report post-results release reaffirms that the company’s revenue met market expectations, with gross margin expansion and reduced operating expenses playing a significant role in surpassing EBITDA predictions.
Stock Trajectory in Focus
Over the last six months, Apollo Tyres has yielded a 3.05% return, underperforming compared to the Nifty50 index’s 6.28% gain during the same timeframe. Nonetheless, the recent uptick in financials will likely draw increased investor attention to the company’s share trends in the upcoming months.
In conclusion, Apollo Tyres’ strong financial results testify to the company’s strategic focus on controlling costs and optimizing operations. The positive response from the stock market suggests a growing investor confidence in the tyre manufacturer’s future.