Buy Apollo Tyres; target of Rs 372: Sharekhan

Sharekhan's research report on Apollo Tyres

ATL is expected to maintain its earnings growth momentum, by increasing focus on premium tyre sub-segments, maintaining dominancy in key segments in India and a firm capital allocation strategy. We expect ATL’s earnings to clock a 43.1% CAGR during FY2022-FY2025E, driven by an 11% revenue CAGR and a 220-bps EBITDA margin expansion to 14.5% in FY2025E. Stock trades attractively at P/E multiple of 10.7x and EV/EBITDA multiple of 5.4x its FY2025E estimates.

Outlook

We maintain a Buy on Apollo Tyres Limited (ATL) with a revised PT of Rs. 372, led by expected market share gains by the company in key segments and markets and attractive valuations.

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Apollo Tyres - 09 -12-2022 - khan