Broker's call: Goldman Sachs maintains Buy rating on Apollo Tyres

Goldman Sachs has maintained their ‘Buy’ rating on Apollo Tyres and retained their 12m FY14E P/B based target price of Rs 96. The stock is currently trading at 1.1x FY14B P/B vs 1.3x 10-year historical average.

Apollo Tyres reported 2QFY13 consolidated PAT of Rs 153 crore, up 97% yoy, up 10.3% qoq and 3.6% above Bloomberg consensus estimates. Slowdown in South African and European operations was offset by significant growth in the India business with PBT up 110% YoY and 4.4% QoQ.

PAT was also boosted by forex gain of about Rs 7 crore, as per management. Raw material costs remained stable on QoQ basis despite natural rubber price declining due to increase in other material and logistical costs.