Buy Apollo Tyres, target price Rs 272: Centrum Broking

Centrum Broking has buy call on Apollo Tyres with a target price of Rs 272. The current market price of Apollo Tyres Ltd. is Rs 232.6. Time period given by analyst is one year when Apollo Tyres Ltd. price can reach defined target.

Apollo Tyres Ltd., incorporated in the year 1972, is a Mid Cap company (having a market cap of Rs 14759.75 Crore) operating in Tyres sector.

Apollo Tyres Ltd. key Products/Revenue Segments include Tyres, Tubes & Flaps, Other Operating Revenue, Others and Scrap for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 5106.21 Crore, up 10.41 % from last quarter Total Income of Rs 4624.92 Crore and up 18.17 % from last year same quarter Total Income of Rs 4321.11 Crore. Company reported net profit after tax of Rs 173.72 Crore in latest quarter.

Investment Rationale
The brokerage expects Apollo tyres to benefit from higher CV sales and stable replacement demand. It expects revenue growth of 11%YoY but lower margins of 12.5%, which is down 485bps YoY on very high base and higher input costs.

Promoter/FII Holdings
Promoters held 37.34 per cent stake in the company as of 30-Sep-2021, while FIIs owned 24.07 per cent, DIIs 14.44 per cent.