17/05/2022

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Apollo Tyres to cut capex by Rs 400 cr this fiscal to preserve cash flow, Auto News, ET Auto

Apollo Tyres has also taken a slash in the capex expense throughout its European operations.

New Delhi: Apollo Tyres has decided to slash its cash expenditure (capex) by Rs four hundred crore this fiscal amid complicated business atmosphere due to the coronavirus pandemic, in accordance to a senior organization official.

“Offered the total demand situation, we have slash back again on capex to the tune of a different Rs four hundred crore in 2020-21 to make guaranteed that we are not pressured from a money stream or a liquidity viewpoint,” Apollo Tyres Chief Economic Officer Gaurav Kumar mentioned in an analyst phone.

The organization experienced before earmarked a capex of all-around Rs 1,four hundred-1,five hundred crore for the domestic operations for the recent fiscal 12 months.

Apollo Tyres has also taken a slash in the capex expense throughout its European operations, he added.

“We would have talked if I keep in mind appropriately the determine in India of Rs 1,four hundred-Rs 1,five hundred crore. That range for the recent 12 months would be about somewhere amongst Rs 1,000 to Rs 1,one hundred crore. And, in the same way, we have taken a slash in the European operations as perfectly,” Kumar mentioned.

With uncertain situation due to growing COVID-19 situations, the organization has taken a variety of techniques to control charge as substantially as attainable, he noted.

“These array from saying no increments for the 12 months, prime management taking wage cuts, cutting down on revenue advertising, advertising and advertising costs, improvements that ended up visible final 12 months on the working cash side and we will carry on to check that very actively,” Kumar mentioned.

On the outlook for the recent fiscal 12 months, he noted, “In terms of what we see on the lookout forward, although we will likely have a revenue decrease in FY21 when compared to FY20, for the reason that the OE (original devices) business is nonetheless on the lookout fairly weak and there is no promising outlook as perfectly.”

But, the point that a the greater part of business is replacement, it is a considerable as well as for the organization, Kumar mentioned.

“Barring passenger car tyre segment, on all other product segments — truck tyres, farm tyres, two-wheeler tyres — we are viewing a very good restoration in the replacement segment,” he added.

All the organization plants in India have began operations beneath the condition government pointers, Kumar noted.

They are managing at reduce ranges of utilisation and as expected would be step by step ramping up, Kumar mentioned.

Commenting on European operations, he mentioned: “We expect a revenue decrease provided the situation…But, there is a chance that revenue could get well sharply. Both equally our plants in Europe are running and likely up in ability utilisation in Hungary and Netherlands.”

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