MUMBAI, India—Apollo Tyres Ltd. is grappling with an ongoing surge in natural rubber costs in India, with new tire price increases on the cards for its customers.
On a Aug. 14 conference call, CFO Gaurav Kumar reported continuing pressure on the raw materials cost front—up 5 percent quarter-on-quarter due largely to domestic NR price increases.
"We expect the raw material costs to go up further by mid-single digits in Q2 on a sequential basis," Kumar told analysts on the call to discuss Apollo's fiscal first quarter results.
Asked about the outlook for NR, Kumar said, "in the immediate future, there doesn't seem to be a respite. With the early monsoons, etc., the availability of natural rubber is quite constrained."
In response, the CFO said Apollo had "introduced small price increases in the current year and will seek to negate the raw material cost pressure through further price increases."
He added, the company is "still short of recovering raw materials cost increases in Q1 and would need at least two to three price increases to cover up fully for the raw material that's peaked (in) Q2."
