Buy Apollo Tyres; target of Rs 600: Motilal Oswal

Buy

Motilal Oswal's research report on Apollo Tyres

We met Apollo Tyres’ (APTY) management to understand the outlook for its key segments. Demand in India across most key segments remained healthy in 3Q, both in replacement and OEM. While this momentum is likely to sustain in 4Q, the outlook for the CV segment remains uncertain. Further, exports demand remained strong in 3Q and is likely to sustain in 4Q as well. However, margins are likely to remain under pressure in India in 2H due to increased promotional spending. While demand in Europe remains muted, APTY continues to outperform the market over a low base. Additionally, APTY has commenced the restructuring of its Enschede facility, the benefits of which are likely to be reflected from 2HFY27E.

Outlook

We factor in APTY to post a 22% earnings CAGR over FY25- 28E over a corrected base. Valuations at 16.3x/14.3 FY27E/FY28E appear attractive, especially when compared to those of peers. We reiterate our BUY rating on APTY with a TP of INR600 (valued at 18x Sep’27E consol. EPS).

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Apollo Tyres - 29122025 - moti