Sharekhan's research report on Apollo Tyres
Management has laid down its long-term targets to achieve revenue of US$5billion by FY2026, EBITDA margin profile to reach at least 15%, ROCE of 12-15%, and net debt to EBITDA of less than 2x. 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 9.6x and EV/EBITDA multiple of 4.7x its FY2023E estimates.
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.
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