Buy Apollo Tyres ; target of Rs 472: Sharekhan

Sharekhan's research report on Apollo Tyres

ATL is on track to achieve its target for FY2026 as EBITDA margin in FY2023 stands at 13.5% against its target for FY2026 at over 15%. Management is looking for volume-based single-digit growth in the Indian business and flat growth in the European business in FY2024. The stock trades at a P/E multiple of 14.2x and EV/EBITDA multiple of 7.0x its FY2025 estimates.

Outlook

Given the firm’s dominating position in the domestic TBR market, the fact that Vision 2026 is on track, the emphasis on premiumisation, and the preference for profitability over simple volume growth, we retain our Buy recommendation on the stock with a revised PT of Rs. 472.