ICICI Direct has given Buy recommendation for Apollo Tyres with a target price of Rs. 250 in its research report issued on May 14, 2022
ICICI Direct’s research report on Apollo Tyres
Apollo Tyres (ATL) is a leading tyre manufacturer, with operations in India & Europe with an installed capacity of ~7.9 lakh MTPA. In India, ATL has substantial presence in TBR (31% market share) & PCR space (21% market share). Derives ~67% revenues from APMEA (largely India), ~32% from Europe • FY22 segment mix: Truck/bus ~43%, PV ~35%, OHT ~10%, others ~12%.
We retain our BUY rating on ATL amid management intent on sweating on assets, controlled capex spends and return ratios focus for the business. Rolling over our valuations, we now value ATL at a target price of Rs 250 i.e., 5.25x FY24E EV/EBITDA (previous target price: Rs 270).