Standalone Revenue stood at Rs. 3,682 crores registering a growth of 25.2% YoY and 13% QoQ.
Operating profit stood at Rs. 407 crores, a decline of (-29%) and a QoQ growth of 9.9%.
Operating margins stood at 11.1%. Operating margins witnessed a big decline of more than 800bps YoY.
Profit After Tax stood at Rs. 90 crores which declined by (-58.5%). PAT showed a growth of 32.1% in QoQ.
Consolidated Results
Consolidated Revenue stood at Rs. 5,106 crores registering a growth of 18.2% YoY and 10.4% QoQ.
Operating profit stood at Rs. 663 crores, a decline of (-8.9%) and a QoQ growth of 9.3%.
Operating margins stood at 13%. Operating margins a decline of more than 386bps YoY.
Profit After Tax stood at Rs. 174 crores which declined by (-13.1%). PAT showed a growth of 36% in QoQ.
Business Highlights
The company saw a good growth in Indian and European operations due to volume recovery, price increases by the company and execution.
The operating margins were impacted by increasing raw material costs and constrains in demand from OEM because of chip shortage.
Consolidated earnings were better due to good operating performance in Europe.
Company took price hikes of 3%-7% during this quarter in replacement segment. It also took prices hikes of 4%-6% in European markets.
UHP and UUHP sales stood at 39% of volumes in Europe which signifies improvement in premium mix.
The company has shown good recovery from the COVID impact. Major contributions in the recovery was due to the business operations in Europe which focuses on premium mix.
The operating margins are getting impacted due to rise in raw material prices and demand constrains.
APMEA geographies grew by 12.9% QoQ to Rs. 3,695 crores. Europe growth was at 5% QoQ to Rs. 1,480 crores.
Earnings call highlights
Capacity utilisation in Indian operations stood at 80% and in European operations stood at 86%.
Growth in Indian volumes stood at 13% YoY in in Q2FY22. Truck volumes grew by 7% YoY, passenger vehicles by 30% and 2-wheeler by 40%.
European growth was due to volume increase and price increase.
The company says that demand outlook for H2FY22 is good. Improvement can be seen in truck OEM segment whereas constrains are being seen in passenger vehicle OEM. Replacement demand in PV is healthy.
UHP tyres share in European product mix currently is 39%. The company wants to increase this share above 40% till 2026.
The company will take another price hikes of 3%-5% across segments as 3% under recovery exists for raw materials costs.
Natural rubber costs in Q2FY22: 175/kg. Synthetic rubber: 160/kg. Steel Cord 165/kg and Carbon black 95/kg.
Rs. 2,000 crores CAPEX during FY22 is estimated at consolidated levels.
The Vredestein Brand was launched in India which would enable the company to introduce high-margin premium segments.
Download
