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Apollo Tires Ltd. reported relatively healthy operating performance in the first quarter of FY21 given the circumstances.

Consolidated net sales fell 33.7% year-on-year (in volume) to Rs 2,873 crore (Asia-Pacific, Middle East & Africa i.e. mainly India revenue down 42 , 1%, revenues in Europe down 12%). Ebitda margins at 8.3% fell 490 basis points in QoQ.

The deterioration in QoT margin was largely due to a 407 basis point drop in gross margins although other expenses were contained, down 119 basis points in QoQ as a percentage of revenue.

APMEA’s EBIT margins fell 130 basis points in QoQ to 2% as losses in Europe increased. The consecutive after-tax consolidated loss amounted to Rs 135 crore, accelerated by the rise in interest charges (up about 101% year-on-year and about 29% quarter-on-quarter).

The company has received the first tranche of investment in mandatory convertible preferred shares by Emerald Sage in the amount of approximately Rs 540 crore, with the second tranche of a similar amount to be received by October 2020.

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