Switzerland based Compagnie Financiere Michelin, group company of the world’s second-largest tyremaker Michelin, has sold 1.69 crore shares of Apollo Tyres, thus reducing its stake in the Indian company to 7.98 per cent or 4.03 crore shares. The French tyre manufacturer had in November 2003 acquired 14.9 per cent stake in Apollo as part of its plan to jointly sell bus and truck radial tyres.That plan did not materialise and Michelin entered the Indian market in September 2005 on its own. Apollo reported a 6 per cent growth in consolidated revenues for the full year ended March 2009. However, PAT at Rs 139 crore was down 48 per cent mainly due to higher interest costs. Interest costs ate up 31 paise on every rupee that the company earned at PBIT levels, Tyre companies have been hurt by a slowdown in the auto sector as well as stiff rubber prices. But with rubber prices easing they are expected to do better in the coming quarters. Apollo is the second largest tyre maker in the country with a 21.4 per cent share, in terms of tonnage production. At the current market price, the stock is trading at 10.5x its trailing 12 month earnings.
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