ICICI Direct has given Buy recommendation for Apollo Tyres with a target price of Rs. 300 in its research report issued on Feb 05, 2021
ICICI Direct’s research report on Apollo Tyres
Apollo Tyres (ATL) reported a robust operational performance in Q3FY21. Consolidated operating income was at Rs 5,154 crore, up 17.1% YoY (APMEA i.e. largely India revenues up 22.7% YoY to Rs 3,449 crore, Europe revenues up 7.5% YoY to Rs 1,747 crore). EBITDA margins came in at a decade high of 19.2% (up 707 bps YoY, up 297 bps QoQ) tracking 120 bps sequential gross margin expansion, India replacement price hikes across segments (2-3%) and Europe product mix improvement. Consequent consolidated PAT was higher by 155% YoY at Rs 444 crore.
We upgrade the stock from HOLD to BUY, valuing ATL at Rs 300 i.e. 6x FY23E EV/EBITDA (previous TP Rs 200).
For all recommendations report, click here