(Reuters) – Tyremaker Goodyear India reported a 58.5% fall in second-quarter profit on Tuesday, hurt by elevated rubber prices and dampened demand.
The standalone net profit of U.S.-based Goodyear Tire’s Indian unit fell to 157.4 million rupees ($1.8 million) for the three months ended Sept. 30, from a year-ago profit of 379.4 million rupees.
Revenue from operations fell 1.1% to 6.82 billion rupees for the company that supplies tyres to BMW and Toyota, among others.
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KEY CONTEXT
Goodyear India is among the first tyre manufacturers to release its results for the September quarter, when Indian carmakers’ sales to dealers fell for the first time in 10 quarters.
“Year-over-year profit was lower due to reduction in volume, raw material inflation,” the company said in a statement.
Analysts noted that international rubber prices saw a sharp uptick, especially in the last two months of the quarter due to global supply shortage, pushing up domestic rubber prices by 20%.
Sales of passenger vehicles, including cars and vans, in the September quarter dropped 1.8% year-on-year, while production dipped 0.7%, industry data showed.
Bigger rival CEAT reported lower second-quarter profit last week, weighed by higher rubber costs.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth growth rating analyst price yield
* s target** (%)
Goodyear India NULL NULL NULL NULL Null 0 NULL 1.36
CEAT 17.12 8.22 9.92 10.83 Buy 15 0.94 1.01
MRF 25.05 12.21 9.39 5.69 Sell 4 1.12 0.16
Apollo Tyres 16.33 8.01 8.21 14.43 Buy 23 0.95 1.18
* The mean of analysts’ ratings standardised to a scale of “Strong Buy”, “Buy”, “Hold”, “Sell”, and “Strong Sell”
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.0500 Indian rupees
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sumana Nandy)
