Apollo Tyres to hike prices by 7%

MUMBAI (makemystocks): Apollo Tyres Ltd (BOM:500877) has hiked product prices by around 7% due to a surge in rubber prices, as said by Neeraj Kanwar, Managing Director, Apollo Tyres Ltd.

However, margins will remain under pressure in the current scenario of high rubber prices. The price of natural rubber has shot up 75% in the last one year. It hit an all-time high above $3.50 per kg on Wednesday, according to a report.

In India, prices, which were on average around Rs 70 per kg last year, are currently at around Rs 165 per kg.

Kanwar further said that a price hike of 20% was needed to maintain margins. The company had reported earnings before interest, taxes, depreciation and amortization margins of 16.80% in Oct-Dec.

Tyre manufacturers were expecting some help from the government on spiraling rubber prices.

Pricing and margin pressures apart, Apollo Tyres expects to maintain a strong revenue growth going forward due to robust automobile sales.

Kanwar said top line growth is likely to be in excess of 20% in 2010-11 due to strong growth in automobile sales.