Moneycontrol PRO
Open App
Upcoming Event: Finterest EduTech Technical Analysis Programme in Oct, book your seats.

Buy Apollo Tyres; target of Rs 275: Emkay Global Financial

Emkay Global Financial is bullish on Apollo Tyres has recommended buy rating on the stock with a target price of Rs 275 in its research report dated August 16, 2022.

August 18, 2022 / 06:41 PM IST
Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's research report on Apollo Tyres


Apollo Types' Q1FY23 revenue increased by 7% qoq (3-year CAGR at 11%) to Rs59.4bn, in line with estimates. EBITDA increased by 10% qoq (3-year CAGR at 13%) to Rs6.9bn, 7% above estimates, due to better gross profit and lower employee costs. APMEA's EBIT margin expanded by 70bps to 4.8%, while Europe's EBIT margin was flat at 4.9%. Management expects benefits of commodity price easing in Q3. We expect a 17% CAGR in APMEA revenue over FY22-24E, led by strong recovery in the OEM segment and stable replacement demand. We believe European revenue should register an 8% CAGR with pick-up in replacement demand and market share gains. We have increased our FY23E-24E EBITDA by 3-5%, mainly due to better gross margin assumptions and cost savings. Following the revision, we expect revenue/EBITDA CAGRs of 15%/19% over FY22-24E.



Outlook


With strong FCFs of Rs13bn/year over FY23-24E, we expect Net Debt-to-EBITDA to drop to 1.3x in FY24E from 2.1x in FY22. We maintain our Buy rating with a revised TP of Rs275 (Rs245 earlier), applying 13x Sep'24E EPS (Jun'24E earlier).

Close

For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Apollo Tyres - 170822 - emkay

Broker Research
first published: Aug 18, 2022 06:41 pm
Sections
ISO 27001 - BSI Assurance Mark