APOLLO TYRE Financial REPORT ANALYSIS

FOR FY 2019-20
apollo Tyres

TYRE MARKET AND APOLLO TYRE FINANCIAL STATUS

The slowdown of global economic growth, along with oil and natural rubber price volatility continue to adversely impact the domestic tyre manufacturing industry. Market capitalization of Apollo tyres as on March 2019 is Rs. 127.42 Bn, second largest Tyre manufacturer in India. Apollo Tyre have net debt of Rs 43.24 Bn as on 2019.

INCOME STATEMENT ANAYSIS

REVENUE FY 2019-20
Rs 163,738 (Mn)
REVENUE FY 2018-19
Rs 176,719 (Mn)

REVENUE FOR FY 2019-20

The last few quarters have really been challenging, in terms of demand, especially from the original equipment (OE) segment. Despite our good show quarter-on-quarter in the replacement segment in India, overall performance has got impacted due to the sluggishness in demand from OEMs," Apollo Tyres Chairman Onkar S Kanwar said.

apollo tyres

PROFIT FOR FY 2019-20

A weak Indian currency can result in pressure on margins,
since the Company is a net importer.

The coming year will have one large investments on stream.
There would be pressure on margins as the utilisations
ramp up gradually.

Company is facing pressure on profitability due to high finance cost on borrowed debt.

PROFIT FY 2019-20
Rs 4,763 (Mn)
PROFIT FY 2018-19
Rs 6,798 (Mn)

BALANCE SHEET ANAYSIS

PARTICULARS

31.03.2020

31.03.2019

DIFFERENCE

NOTES

OUTLOOK

BALANCE SHEET

NON CURRENT ASSETS

--------------

Property, plant and equipment

Rs 144,956 mn

Rs 108,838 mn

Rs 36,118 mn

Purchase for expansion or new machinary

POSITIVE/ NEGATIVE

BALANCE SHEET

CURRENT ASSET

---------------

Inventories

Rs 32,069 mn

Rs 34,840 mn

Rs 2,771 mn

Reduction in inventories means sale of stock

POSITIVE

Trade receivables

Rs 9,398 mn

Rs 13,143 mn

Rs 3745 mn

Reduction in trade receivables means debtors has paid the due amount

POSITIVE

Cash and cash equivalents

Rs 7,386 mn

Rs 5,554 mn

Rs 1832 mn

Increase in cash indicates more money in bank.

POSITIVE

BALANCE SHEET

NON CURRENT LIABILITIES

----------------

 Borrowings

Rs 59,727 mn

Rs 41,693 mn

Rs 12,034 mn

Long term borrowing for investment in expansion and loan repayment.

NEGATIVE

BALANCE SHEET

NON CURRENT LIABILITIES

-----------------


Borrowings

Rs 27,923 mn

Rs 15,386 mn

Rs 12,537 mn

Short term borrowing for investment in expansion and loan repayment.

NEGATIVE

Trade payable

Rs 22,919 mn

Rs 20,536 mn

Rs 2383 mn

Increase in trade payable means purchase of raw material on credit.

NEGATIVE

NOTES

Apollo Tyres started investment on setting up a new greenfield facility in Andhra Pradesh. This involves a significant capital commitment, along with other investment needs (both growth and maintenance/ administrative). These will result in higher leveraging of the balance sheet and a strain on the financials.

CASH FLOW STATEMENT ANAYSIS

CASH FLOW FROM OPERATING ACTIVITIES

  1. Depreciation of Rs 11,381 charged.
  2. Finance cost Rs. 2,808 accrued.

NET CASH GENERATED – Rs 25173 mn compared to 10,711 mn

CASH FLOW FROM INVESTING ACTIVITIES

  1. Purchase of long term assets Rs 28,361 mn compared to Rs 22,931 mn

NET CASH GENERATED – Rs (27,958) mn compared to Rs (9,959.25) mn last year

CASH FLOW FROM FINANCING ACTIVITIES

    1. Borrowed long term capital of Rs 23,537 mn
    2. Borrowed short term capital of Rs 8467 mn
    3. Repayment of long term loan Rs 18,141 mn
    4. Dividend paid Rs 4,310 mn

NET CASH GENERATED – Rs 4,724 mn compared to Rs (622) mn last year

CONCLUSION

Company borrowed loan to repay part of loan and to invest in Andhra project. Another important point is company is paying dividend even though profits are declining, that mean company is not able to generate revenue form shareholders fund or shareholder are trying to get most out of profit.

Above Analysis is based on Consolidated Statement. I am neither an investment adviser nor a stockbroker to provide recommendations and none of my answers is to be construed as buy/sell recommendations. All I am doing is, showing the facts of company, which cannot be seen through charts and news.

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