If commodity rates remain high, Apollo Tires may hike prices further in the fourth quarter.
see photosThe company has attributed the rise in prices to the rise in commodity prices.
According to top company officials, Apollo Tires will increase the prices in the domestic market by 3-5 per cent in the third quarter of the current financial year. If commodity rates remain high, the company is likely to hike prices further in the fourth quarter. Speaking to the media during the Q2 FY22 results conference call, Apollo Tires Vice President and Managing Director Neeraj Kanwar said that the company has increased tire prices on an average by about 9 per cent till September.
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He further added, “We are increasing the prices in the months of October and November between 3% to 5% across different segments in this quarter.”
Revenue from operations was higher by ₹3,649.71 crore as against ₹2,911.57 crore in the year-ago quarter.
When asked what would be the level of recovery due to cost inflation in the country post the price hike, Gaurav Kumar, CFO, Apollo Tires said, “Raw material cost remains a moving target. Even from Q2 onwards. In the third quarter also, we expect a smaller cost. The push is coming because of raw materials. I would say broadly, we are trailing on two price hikes that are more than desirable.”
In the second quarter ended September 30, Apollo Tires reported a 59 per cent decline in standalone net profit at Rs 89.65 crore as against Rs 216.24 crore in the same period of the previous fiscal, impacted by higher raw material cost. Revenue from operations was higher by ₹3,649.71 crore as against ₹2,911.57 crore in the year-ago quarter. The cost of raw material consumed in the second quarter increased to ₹ 2,471.63 crore as against ₹ 1,527.06 crore in the same period a year ago.
The cost of raw material consumed in the second quarter increased to ₹ 2,471.63 crore as against ₹ 1,527.06 crore in the same period a year ago.
Kumar further said that normalcy in India is slowly returning to an unprecedented pandemic situation. The company is currently witnessing a steady improvement in the pace of demand. “Demand for truck tire OEMs, which was lagging behind, is showing promising signs of improvement. However, demand for passenger car OEMs continues to decline due to semiconductor shortages,” he said.
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He also said that going forward demand momentum for the second half (H2) of the current fiscal appears to be better and further hike in prices for November has been announced to counter the rise in raw material cost. .
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