Buy Apollo Tyres; target of Rs 429: Sharekhan

Sharekhan's research report on Apollo Tyres

Both APMEA and European businesses have been registering EBIT margin for three consecutive quarters, despite challenging business scenarios. ATL continues to focus on profitable volume growth via offering quality products at premium products to sustain its operating performance. The stock trades at a P/E multiple of 12.9x and EV/EBITDA multiple of 6.5x its FY2025E estimates.

Outlook

We maintain our Buy rating on Apollo Tyres Limited (ATL) with a revised PT of Rs. 429, in expectation of a 140 bps EBITDA margin expansion in the next two years, its dominant position in the domestic TBR segment, and focus on profitability over plain vanilla volume growth.

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