Kotak Securities downgrades 3 Major tyre stocks, citing high crude prices

The year 2022 was not a favourable start for the majority of industries due to high commodity prices, low demand, high inflation, and high-interest rates, and all of this had impacted the companies' gross margins in the March quarter. Ceat: For the fourth quarter ended March 2022, Ceat reported an 84 per cent drop in consolidated net profit to Rs 25 crore. Consolidated Financials MRF Ceat JK Tyre Good Year Apollo Tyres Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Total Revenue 5,370.8 4,874.2 2,595.3 2,292.9 3,319.6 2,944.6 602.8 574.5 5,615.5 5,087.6 Operating Expenses 4,764.6 4,050 2,404.5 2,028.9 3,083.9 2,268.9 564.7 501.9 4,952 4,211 Operating Profit 540.2 766.4 187.5 260.8 227.9 500.4 33.5 67.5 626.4 814.7 Operating Profit Margin 10.18% 15.91% 7.23% 11.39% 6.88% 18.07% 5.60% 11.85% 11.23% 16.21% Interest 67.4 76.8 56.6 39.9 100.7 105.3 1.4 0.8 127.9 104.2 Profit Before Tax 228 449 18.7 134.2 44.4 280.6 23.3 58.4 160.2 423.4 Tax 62.8 116.8 1 -11 5.9 84.5 5.9 15.2 46.7 136.1 Profit After Tax 165.2 332.1 25.2 152.8 40.2 189.1 17.4 43.2 113.5 287.3 JK Tyre: JK Tyre & Industries reported an 80 per cent decline in consolidated net profit at Rs 40.2 crore for the fourth quarter ended March 31, 2022. Apollo Tyres: Apollo Tyres reported a 61 per cent drop in consolidated net profit to Rs 113 crore for the fourth quarter ended March. For the year ended March 31, 2022, the tyre major reported an increase in net profit by 82 per cent to Rs 639 crore, as compared to Rs 350 crore in 2020-21.