Apollo Tyres Faces a Rocky Road: Profits Drop Amid Weak Demand and Rising Costs

Apollo Tyres reported a 37% decline in its profit after tax for the September 2024 quarter, attributing the decrease to weak demand in India and rising raw material costs. Despite seeing revenue growth in Europe, the overall domestic market showed sluggish performance. The company plans to raise Rs 1,000 crore via non-convertible debentures.

Apollo Tyres reported a significant 37% drop in consolidated profit after tax, totaling Rs 297 crore, for the September 2024 quarter. The decline comes as a result of subdued demand in India's domestic market and escalating raw material prices.

Last year, the tyre manufacturer posted a profit after tax of Rs 474 crore during the same fiscal quarter. Despite registering a slight increase in revenue, standing at Rs 6,437 crore compared to Rs 6,280 crore the previous year, challenges in the OEM segment in India offset gains made in the replacement sector.

In a contrasting scenario, Apollo witnessed positive revenue growth within Europe, particularly in the passenger vehicle segment. To manage ongoing financial hurdles, the company's board has sanctioned a fundraising initiative of up to Rs 1,000 crore via non-convertible debentures. Trading resulted in a 3.19% decline in share value, closing at Rs 456.35 on the BSE.

(With inputs from agencies.)