Apollo Tyres Q3 consolidated PAT seen down 5% at Rs 114 cr

Apollo Tyres, country's largest tyre manufacturer, is expected to report a consolidated profit after tax of Rs 114 crore in the third quarter of FY12, degrowth of 5% as compared to Rs 120 crore in a year ago quarter.

Even operating profit margin is seen declining at 9.8% versus 11.5% year-on-year.
Revenues are likely to go up by 22% to Rs 2,887 crore from Rs 2,368 crore during the same period. What to watch out for :
* Demand for tyres in Europe increases in winter season, thus higher sales seen.
* Rubber prices have cooled of around 3% QoQ , thus improvement in sequential margins at 9.8% versus 8% QoQ
* Raw material costs as a percentage of sales to come down, last quarter was very high 77.8%
* Consolidated business driven by European subsidiary, Vredestein BV that saw revenues growth of 44% last quarter
* However south african subsidiary continues to see muted growth
* Also domestic demand in replacement market (55% of topline) was weak last quarter, need to see if that continues