Buy Apollo Tyres; target of Rs 290: ICICI Direct

ICICI Direct's research report on Apollo Tyres

Apollo Tyres (ATL) is a leading tyre manufacturer, with operations in India & Europe with an installed capacity of ~7.9 lakh MTPA. In India, ATL has a substantial presence in TBR (31% market share) & PCR space (21% market share). Derives ~67% revenues from APMEA (largely India), ~32% from Europe • FY22 segment mix: Truck/bus ~43%, PV ~35%, OHT ~10%, others ~12%.

Outlook

We retain our BUY rating on ATL amid strong intent on sweating of assets, controlled capex spends and return ratios focus for the business. Upgrading our estimates, we now value ATL at a target price of Rs 290 i.e., 6x FY24E EV/EBITDA (earlier target price: Rs 250).

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