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Last Updated : Nov 07, 2019 03:02 PM IST | Source: Moneycontrol.com

Hold Apollo Tyres; target of Rs 180: ICICI Direct

ICICI Direct recommended hold rating on Apollo Tyres with a target price of Rs 180 in its research report dated November 06, 2019.

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ICICI Direct's research report on Apollo Tyres


Apollo Tyres (ATL) reported mixed results in Q2FY20. Consolidated revenues dipped 6.4% YoY to Rs 3,986 crore (APMEA down 10.3%, Europe up 3.5%) Consolidated EBITDA margins came in at 10.8% (down 13 bps QoQ), with 30 bps gross margin expansion driving the performance. APMEA EBIT margins dropped 120 bps QoQ to 6.3% while that of Europe declined 220 bps to -3.2%. Consequent consolidated PAT was at Rs 83 crore (down 43.1% YoY), impacted by lower other income and increase in depreciation costs. ATL said it would be issuing Rs 500 crore worth of non-convertible debentures on a preferential allotment basis.


Outlook


We expect sales, PAT to grow at a CAGR of 2.7%, 0.6%, respectively, in FY19-21E. We maintain our HOLD rating with a revised target price of Rs 180 i.e. 6.5x EV/EBITDA on FY21E estimates.

For all recommendations report, click here

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First Published on Nov 7, 2019 03:02 pm
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