Sharekhan has given Buy recommendation for Apollo Tyres with a target price of Rs. 303 in its research report issued on Aug 16, 2022
Sharekhan’s research report on Apollo Tyres
ATL is expected to benefit from its strategy of deleveraging its balance sheet, improving operating leverage and focusing on firm capital allocation and cash management going forward. Management maintains its long-term goals. We expect ATL’s earnings to clock a 57.6% CAGR during FY2022-FY2024E, driven by a 13.1% revenue CAGR and a 130 bps EBITDA margin expansion to 14.2% in FY2024E. Stock trades attractively at P/E multiple of 9.9x and EV/EBITDA multiple of 4.9x its FY2024E estimates.
We maintain a Buy rating on Apollo Tyres Limited (ATL) with an unchanged PT of Rs303, led by the company’s dominant position in key markets, expected market share gains across segments, and attractive valuations.