Buy Apollo Tyres, target price Rs 305: Emkay Global

Emkay Global has buy call on Apollo Tyres with a target price of Rs 305. The current market price of Apollo Tyres Ltd. is Rs 222.2. Time period given by analyst is one year when Apollo Tyres price can reach defined target.
Apollo Tyres Ltd., incorporated in the year 1972, is a Mid Cap company (having a market cap of Rs 14270.72 Crore) operating in Tyres sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 4624.92 Crore, down -9.09 % from last quarter Total Income of Rs 5087.57 Crore and up 59.46 % from last year same quarter Total Income of Rs 2900.28 Crore. Company reported net profit after tax of Rs 127.78 Crore in latest quarter.

Investment Rationale
The positive stance on APTY is based on expectations of a strong volume recovery in domestic and European markets and cost-saving measures. The brokerage maintains Buy with a revised TP of Rs305 (15x Sep’23E EPS). Key downside risks are lower-than-expected demand in key geographies, higher competitive intensity, further increase in commodity prices and adverse currency movements.


Promoter/FII Holdings
Promoters held 37.6 per cent stake in the company as of June 30, 2021, while FIIs held 22.9 per cent, DIIs 15.7 per cent and public and others 23.9 per cent.