Sharekhan has given Buy recommendation for Apollo Tyres with a target price of Rs. 245 in its research report issued on Apr 25, 2022

Sharekhan’s research report on Apollo Tyres

ATL is set to benefit from its strategy by deleveraging its balance sheet, improving operating leverage, and focus on firm capital allocation and cash management going forward. We expect ATL’s earnings to grow by 31.3% CAGR during FY2021-FY2024E, driven by a 12.4% revenue CAGR and a 60 bps EBITDA margin expansion to 16% in FY2024E. The stock trades attractively at P/E multiple of 9.5x and EV/EBITDA multiple of 4.6x its FY2024E estimates.

Outlook

We maintain our Buy rating on Apollo Tyres Limited (ATL) with a revised PT of Rs. 245, led by the company’s dominant positions in key markets, expected market share gains across segments, and attractive valuations.

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