ICICI Direct has given Buy recommendation for Apollo Tyres with a target price of Rs. 335 in its research report issued on Sep 09, 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 a 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 strong focus on capital efficiency, controlled capex spends and healthy margin recovery for the base business. Upgrading our margin estimates, we now value ATL at a target price of Rs 335 i.e., 6x FY24E EV/EBITDA (previous target price: Rs 290).