By Sharad P Matade
The year 2018-19 was a period of many challenges to Indian tyre majors. Rising crude prices, increase in cost of raw materials such as natural rubber, subdued demand in the automobile sector leading to production cuts etc hit the bottom line of tyre companies during the year. However, major tyre companies managed to report positive numbers in their revenues for the year, thanks to robustness in the export market and tight control over operational expenses.
Here is a peak into the financial performance of tyre majors in 2018-19:
Apollo Tyres Ltd
Apollo Tyres’ net profit in the financial year 2018-19 was impacted by surged raw materials prices and the write-off for IL&FS in the fourth quarter ended March 31, 2019. Net profit of the company stood at Rs6.80 billion in FY2018-19 as against Rs 7.24 billion in FY 2017-18, a decline of 6%.
Apollo Tyres had written off Rs 1 billion for the January- March 2019 quarter and a total of Rs 2 billion for the financial year 2018-19 on account of IL&FS issue.
MRF reported a marginal rise in its standalone net profit to Rs10.97 billion in FY 2018-19 from Rs 10.92 billion during the previous year. However, total income rose 4.80% to Rs 162.54 billion in FY 19 compared with Rs 155.10 billion during the previous year.
Among total expenses, raw materials cost in FY 2018-19 mounted to Rs102.20 billion compared to Rs87.47 billion in FY 2017-18, an increase of over 16%.
MRF said its profit before tax stood at Rs 16.09 billion for the year ended March 31, 2019, as against Rs 16.02 billion for the previous financial year. MRF’s exports for FY 2018-19 increased to Rs 15.66 billion from Rs 13.53 billion for the previous year ended March 31, 2018.
JK Tyre & Industries Ltd
Hitting a major milestone, JK Tyre & Industries Ltd crossed the Rs100 billion mark in sales for the first time in FY 2018-19. The company reported sales of Rs103.70 billion during the year, up 24% as against Rs83.97 billion in FY 2017-18. The company’s net profit stood at Rs1.70 billion during the year.
JK Tyre also said its volumes grew by 20% despite a ‘slowdown’ in the automotive sector in the second half of the year and could enhance its market presence across categories, led by the high capacity utilization of Cavendish, the recently acquired subsidiary of the company. This also resulted in higher PBT for the year.
CEAT, unlike its peers, witnessed growth in both top line and bottom line. Consolidated revenues grew over 11% to Rs 69.85 billion in FY 2018-19. The company had reported consolidated revenue of Rs 62.84 billion in FY 2017-18. The Mumbai-based tyre maker’s consolidated net profit stood at Rs 2.52 billion, an increase of 6% in FY 18-19 as compared with a consolidated net profit of Rs 2.38 billion in FY 2017-18. EBITDA grew at 3.9% to stand at Rs 6.63 billion. PAT for the year was Rs 2.51 billion.
Balkrishna Industries Ltd (BKT) reported an increase of 6% in its net profit for FY 2018-19 to Rs7.82 billion as against Rs7.39 billion in the previous year. Revenue from operations rose 17.47% to Rs52.45 billion in the year ended March 2019 as against Rs44.64 billion during the previous year.
TVS Srichakra’s net profit declined 9.4% to Rs1.53 billion for FY 2018-19 from Rs 1.69 billion in FY 2017-18. Consolidated revenues, however, increased to Rs 24.31 billion from Rs 22.03 billion in the corresponding year. Raw material cost for FY 2018- 19 increased to Rs15.39 billion as against Rs 12.30 billion in FY 2017-18.