ICICI Direct recommended hold rating on Apollo Tyres with a target price of Rs 180 in its research report dated November 06, 2019.
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.
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
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.