Sharekhan has given Buy recommendation for Apollo Tyres with a target price of Rs. 290 in its research report issued on Oct 05, 2021
Sharekhan’s research report on Apollo Tyres
ATL is set to benefit from its strategy by deleveraging its balance sheet, capital utilisation of more than 90%, and focus on firm capital allocation and cash management in the medium term. We expect ATL’s earnings to report robust 44% CAGR during FY2021-FY2023E, driven by a 12.9% revenue CAGR and a 160 bps EBITDA margin expansion to 17% in FY2023E. The stock trades attractively at P/E multiple of 9.5x and EV/EBITDA multiple of 4.7x its FY2023E estimates.
Outlook
We maintain our Buy rating on Apollo Tyres Limited (ATL) with an unchanged PT of Rs. 290, led by the company’s dominant positions in key markets, expected market share gains across segments, and attractive valuations.