News

Published: November 8, 2023
Updated: November 8, 2023

Apollo Tyres Stock Soars with Remarkable Q2 Performance

Impressive Q2 earnings drive Apollo Tyres stock to new heights, outperforming expectations and reflecting a significant surge in consolidated net profit.

Strong Market Opening

Apollo Tyres made an emphatic start in Wednesday's trading session as its stock surged over 5%. The stock opened at ₹391 per share, showing a substantial increase from the previous day's closing price of ₹384.10.

Record Q2 Profit Growth

Apollo Tyres posted stellar results for the September quarter, reporting a remarkable 164.80% surge in its consolidated net profit, which reached ₹474 crore. This is a substantial leap from ₹179 crore in the same period the previous year and ₹397 crore in the preceding June quarter.

Revenue Growth and Operating Profit

The revenue from operations in Q2 FY24 reached ₹6,280 crore, showing significant growth compared to ₹5,956 crore in the corresponding quarter of the previous fiscal year. The company reported an operating profit of ₹1,160 crore in Q2, marking a 63% increase from ₹712 crore in the year-ago quarter.

Impressive EBITDA Margin

Apollo Tyres also demonstrated a strong EBITDA margin, reaching 18% in Q2. This represents a substantial year-over-year growth of 600 basis points (bps) and a quarter-over- quarter growth of 100 basis points (bps).

Market Response

Following the release of these impressive figures, Apollo Tyres experienced a robust opening in Wednesday's trading session. The stock price surged to an intraday high of ₹406 per share, marking a remarkable 5.70% increase.

Strategic Vision and Initiatives

HDFC Securities, a domestic brokerage firm, acknowledged Apollo Tyres' strategic initiatives. These include a focus on premiumization in both the Indian and European markets, a deliberate decision to exit unprofitable product SKUs, the increased use of digital tools to enhance operational efficiency, and a commitment to maximize the use of existing assets, reducing annual capital expenditure.

Stable Industry Dynamics

HDFC Securities also noted the commendable pricing discipline in the domestic tire industry in recent years. This discipline, along with reduced Chinese competition, has contributed to reduced earnings volatility for industry players.

Future Prospects

As a result, the brokerage expressed confidence in Apollo Tyres' progress toward achieving its Vision 2026, especially in terms of improving Return on Capital Employed (RoCE), which increased from 4.9% in FY20 to 10% in FY23.

Apollo Tyres' exceptional Q2 performance and strategic initiatives are driving the company's growth and stability. The positive industry dynamics and a clear focus on long-term profitable growth position Apollo Tyres for continued success.