Apollo Tyres Ltd said its net profit in the second quarter fell 58.8% to Rs53.3 crore from Rs129.2 crore last year, due to high input costs, especially that of rubber prices hurting margins.
"It's been a very difficult six months managing the unprecedented rise in natural rubber prices. Even when international natural rubber prices were significantly lower than Indian prices, we were unable to import in large quantities due to the duty policy of the government," Onkar S Kanwar, chairman, Apollo Tyres said in a statement.
During the September quarter, the company's net sales witnessed a decline of 4.7% to Rs1,948.9 crore from Rs2,046.2 crore.
The company had hiked prices due to the high natural rubber prices. "We have had no option but to pass on price increases to our customers, though it is impossible to pass on a near 50% increase in the course of one year," Mr Kanwar said, adding the natural rubber constitutes 60% of the raw material costs.
On Friday, Apollo Tyres shares shed 7% at Rs65 on the Bombay Stock Exchange, while the benchmark Sensex declined 2.1% to 20,156 points.
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