The surge in import of commercial vehicle tyres has made a dent on Apollo Tyres' revenue from domestic operations in the first quarter of FY16.
The company’s net sales witnessed a drop of 12 per cent to ₹28.32 billon (₹2,832 crore) from ₹32.23 billion (₹3,223 crore) during the period.
According to the company, the increasing import of commercial vehicle tyres into the country has adversely impacted the revenue of domestic operations, while the European operations reported flat revenue growth during the quarter.
More than 30 per cent of the demand for truck-bus radials from the replacement market in India is being met by these imported tyres, which are mostly from China.
However, the company has registered a 27 per cent growth in net profit at ₹2.91 billion (₹291 crore) in Q1. Operating profit was at ₹5.29 billion (₹529 crore), an increase of 15 per cent, from ₹4.58 billion (₹458 crore).
At the 42nd annual general meeting here on Tuesday, shareholders approved the annual dividend payout of 200 per cent per share (₹2.00 per equity share), for the year ended March 31, 2015.
Onkar S.Kanwar, Chairman, Apollo Tyres Ltd, said, “In a slow-growth market across geographies, further marred by unregulated import of tyres in India, we have planned and invested to capitalise on the future opportunities. This strategic planning will reduce our dependence on a particular market for growth and help us expand our global footprint.”