Buy Apollo Tyres, target price Rs 329: ICICI Securities

ICICI Securities has buy call on Apollo Tyres with a target price of Rs 329. The current market price of Apollo Tyres Ltd. is Rs 279.4. 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 17751.07 Crore) operating in Tyres sector.

Apollo Tyres Ltd. key Products/Revenue Segments include Tyres, Tubes & Flaps, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 5952.61 Crore, up 6.00 % from last quarter Total Income of Rs 5615.49 Crore and up 28.71 % from last year same quarter Total Income of Rs 4624.92 Crore. Company reported net profit after tax of Rs 190.65 Crore in latest quarter.

Investment Rationale
The brokerage expects disciplined pricing strategy, recovering demand and controlled capex to augur well for APTY in coming years. This may help the company deliver FCF consistently with >15% RoCE levels. Maintain BUY with DCF-based price target of Rs329 (earlier: Rs306), implying ~14x FY24E earnings.

Promoter/FII Holdings
Promoters held 37.34 per cent stake in the company as of 30-Jun-2022, while FIIs owned 24.72 per cent, DIIs 13.46 per cent.