New Delhi: After the company put an end to the manufacture of bias off-the-road (OTR) tyres at its manufacturing facility in Limda, Gujarat, shares of Apollo Tyres Limited dropped more than 2% to Rs 369 in early trade on September 21. The suspension is the result of worries from shop floor workers over the extension of a long-term settlement deal.
In an exchange filing, the business said that the production of bias and OTR tyres at its facility in Limda, Gujarat, had been halted because shop floor workers had certain reservations about the renewal of the long-term settlement agreement.
Apollo Tyres said that it was in talks and negotiations with labour union leaders to resolve their issues and come to a mutually agreeable conclusion. Apollo further added that this circumstance won’t significantly affect the business’s operations.
“The company is committed to advancing the interests of its stakeholders, its workers, and the organization’s long-term stability. Plans are in place to minimize potential supply interruptions, and the corporation is actively monitoring the situation. At this point, the activities are unaffected materially, the company said.
The company is in discussions and negotiations with the labour union leaders to resolve their concerns and arrive at a mutually beneficial conclusion.
Analysts suggest that Apollo Tyres’ stock price witnessed a downward gap in its beginning today, although there hasn’t been much movement in the first few minutes. Stock prices have sharply dropped during the previous month, underperforming the market as a whole.
Although there is strong support seen in the region of 355 to 360, which corresponds to the 200-day simple moving average, the trend going forward is still bearish. Trading participants may think about accumulating this stock at the defined average levels in light of the oversold conditions. The stock’s next obstacle is at 400, according to Rajesh Bhosale, an equity technical and derivative analyst at Angel One.
The company continues to have an ‘equal-weight’ rating from international firm Morgan Stanley, with a target price of Rs 425. According to the brokerage, during the next 60 days, the share price will decline in relation to the national index. Morgan Stanley said that the tyre business might not hike prices this time due to high margins already and that the corporation must boost prices by 4% to offset cost challenges.
Trendlyne statistics show that Apollo Tyres’ stock price increased by 31.5% last year, underperforming its sector by 0.8%.
The combined net profit for Apollo Tyres more than doubled to 397 crore for the June quarter from 177 crore in the same quarter the previous year.
A larger-than-expected increase in quarterly profit was recorded by the firm, helped by decreased rubber prices and strong domestic vehicle sales in all countries.
According to a statement from the firm, operating revenue for the quarter grew 5% to finish at 6,245 crores in the June quarter as opposed to 5,942 crores in the same time last year.
- Products from Apollo Tyres are offered in 170 nations, with India and Europe serving as the two principal export markets. Compared to 2021–2022, the company’s consolidated revenue from operations was Rs 24,568 crore in 2022–2023.