Buy Apollo Tyres; target of Rs 550: Emkay Global Financial

Emkay Global Financial is bullish on Apollo Tyres has recommended buy rating on the stock with a target price of Rs 550 in its research report dated February 08, 2025.

Broker Research

February 12, 2025 / 21:42 IST

BUY

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Apollo Tyres

APTY delivered a steady Q3, with revenue growth accelerating to 5% YoY, surpassing our estimate (by 3%), and driven by strong replacement demand; offset by flattish exports and weak OEM demand. Consolidated EBITDAM expanded marginally by ~10bps QoQ to 13.7% with EBITDA improving 8% QoQ to Rs9.5bn, despite a 15% YoY rise in RM costs, supported by operational efficiencies/improved margins in the European business. Management anticipates a gradual margin recovery going into Q4 as RM prices stabilize. APTY reiterated its stance on balancing growth and profitability, with CV recovery and improving OEM demand expected to support Q4FY25 performance. We have built in ~5/7% revenue/PAT CAGR over FY24-27E;

Outlook

We trim our earnings estimate for FY26/FY27 by ~3% on the back of gradual margin recovery expectation, but maintain our BUY rating with an unchanged TP of Rs550 at 17x Dec-26E.

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