Sharekhan has given Buy recommendation for Apollo Tyres with a target price of Rs. 290 in its research report issued on Feb 04, 2021
Sharekhan’s research report on Apollo Tyres
Q3FY2021 results were better than expected as EBITDA margins rose sharply. On back of strong operational performance, we have upgraded our earnings estimates by 55%/49% for FY22E/FY23E, largely driven by a 220 bps/280 bps EBITDA margin expansion to 16.4%/17.4%, respectively, to reflect a sharp increase in operational improvements in the company. The stock trades attractively at P/E multiple of 10.2x and EV/EBITDA multiple of 5x its FY2023E estimates.
Outlook
We maintain Buy rating on Apollo Tyres Limited (ATL) with a PT of Rs. 290, factoring strong traction in business outlook and an upgrade in earnings estimates.
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