Apollo Tyres (APTY)’s 1QFY26 consolidated performance was in line with our estimates. However, while standalone performance was much ahead of our estimates, the European business margin was weaker than expected. On account of its weak performance in Europe, we reduce our EPS estimates by 10%/6% over FY26/FY27E. We factor in a 60bp improvement in APTY’s margin during our forecast period, driving a 21% PAT CAGR over a corrected base. Valuations at 15.2x FY27E appear attractive, especially when compared to peers. We reiterate our BUY rating on APTY with a TP of INR520 (valued at 18x Jun’27E consol. EPS).
OutlookValuations at 15.2x FY27E appear attractive, especially when compared to peers. We reiterate our BUY rating on APTY with a TP of INR520 (valued at 18x Jun’27E consol. EPS).
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