Apollo Tyres plans to hike prices by 3-5% in domestic market

Apollo Tyres is taking a price hike of 3-5 per cent in the domestic market in the third quarter of this fiscal to offset the impact of rising commodity prices, which if continue to remain high, may compel it to take a similar increase in the fourth quarter, according to top company officials.

Up until September, the company had taken an average increase of around 9 per cent in tyre prices, Apollo Tyres Vice Chairman and Managing Director Neeraj Kanwar told analysts.

When asked what would be the level of "under recovery" on account of cost inflation in India even after the price hikes, Apollo Tyres CFO Gaurav Kumar said raw material costs continue to be a moving target.

"Even in Q3 from Q2, we expect a small cost push coming on account of raw material. I would say broadly, we are running about two price increases behind vis–vis what is desirable," he added.

In the second quarter ended September 30, Apollo Tyres had posted a 59 per cent decline in standalone net profit at Rs 89.65 crore as compared to Rs 216.24 crore in the same period last fiscal, impacted by high raw materials cost.

The company's standalone revenue from operations were higher at Rs 3,649.71 crore as against Rs 2,911.57 crore in the year-ago quarter. Cost of raw materials consumed in the second quarter had shot up to Rs 2,471.63 crore as compared to Rs 1,527.06 crore in the same period a year ago.