Apollo Tyres Ltd. share price forecast

Expected India CV cyclical rebound, higher radialisation levels, pent up demand in PV and network expansion to be major topline drivers. We expect India-led 16.9% FY21-23E net sales CAGR Higher cost competitiveness post Dutch plant specialisation, Europe mix...

Consolidated performance: Revenue grew 18% YoY (11% QoQ) to INR50.8b (v/s est. INR48.7b). EBITDA declined 10% YoY (+13% QoQ) to INR6.4b (v/s est. INR6.6b). Adj PAT grew 37% YoY/QoQ to INR 1.77b (v/s est. INR1.8b). Standalone revenue growth was strong at 25% YoY (13% QoQ) to INR36.5b (v/s INR33.8b), driven by 13% volume growth. The gross margin declined 160bp QoQ (9.7pp YoY) to 32.6% (v/s est. 35%), impacted by higher-than-estimated cost inflation. The EBITDA margin declined 8.6pp YoY (-10bp QoQ) to 10.3% (v/s est. 11.7%). Adj PAT declined...

Apollo Tyres Limited manufactures tires and tubes for cars, trucks, farm equipment, and light commercial vehicles. The company markets its products with two global brands: Apollo and Vredestein in APMEA (Asia...

Q1 revenue in line but EBITDA margin disappoints at 12.4% due to gross margin pressure and lower operating efficiency

On the margin front, ATL said that Europe margins achieved in H2FY21 (~15%) are sustainable, with Dutch plant specialisation holding the key to future performance. The company seeks to reduce raw material consumption by ~5-7% on like-to-like basis over the next five years, with production ramp up set to deliver operating leverage benefits across geographies, going forward. ATL is exploring organisation-wide capacity de-bottlenecking opportunities as a means to improve efficiencies. In order to meet revenue target, a fresh round of PCR and TBR expansion would be...

Performance at the gross margin level in Q4FY21 surprised us positively. As against our expectation of 360 bps QoQ contraction on account of sharp increase in prices of key inputs over the past few months, the deterioration was limited to 240 bps. ATL undertook a price hike of 4.5% in India replacement segment in H2FY21. Going forward, we believe margins at the blended level would face pressures in the form of ongoing commodity cost escalation and dip in India channel mix (sales to OEMs set to grow faster than sales to aftermarket). However, completion of Dutch plant...

Apollo Tyres (APTY) delivered an operational beat in Q4FY21 led by better margins in European operation.

Apollo Tyres Limited manufactures tires and tubes for cars, trucks, farm equipment, and light commercial vehicles. The company markets its products with two global brands: Apollo and Vredestein in APMEA (Asia...

Q3FY21 margin performance was stupendous, riding on operating leverage benefits, price hikes in India and better product mix across geographies. Spike in prices of key inputs (natural rubber, crude derivatives) are seen impacting gross margins over the short term, thereby leading to an element of normalisation on the overall print. However, supportive factors exist in the form of tighter control over fixed costs along with sharp focus on improvement in European profitability. We build 15%, 16.3% margins on the consolidated basis for FY22E, FY23E, respectively. ATL's consolidated net...

Apollo Tyres (APTY) delivered an operational beat in Q3FY21.

Domestic auto industry volumes have been on a steady mend in the months post lifting of lockdown restrictions. Manufacturing and distribution activities have been getting ramped up gradually since June 2020, in step with the rest of the economy. However, the impact of the pandemic on the supply chain continues to inhibit a complete return to production normalcy. Nevertheless, most automotive industry segments have reported successive improvement in offtake throughout June-November 2020 (Exhibit 1) on the back of (i) initial bounce provided by pent-up aspect,...

Apollo Tyres (APTY) delivered a Q2FY21 beat and has rallied 40% in the last three months due to domestic volume visibility, a better Europe performance and steady margin outlook.

Heavy capex over the past few years (completed doubling of Chennai TBR capacity in 2018, currently in the latter stages of ~| 3,800 crore worth greenfield expansion in Andhra Pradesh) have led to sharp increase in net debt levels from

Apollo Tyres (APTY) surprised positively on both revenue and earnings in Q2FY21, led by strong replacement demand in Indian markets, better Europe operations and above-expected operating efficiency.

Apollo tyre(APTY) reported strong all-round performance in Q2FY21 driven by 1) strong revenue traction in replacement market (+18% YoY for TBR and 11% YoY for PCR) benefited from supply issues faced by its competitors and ban on import of Chinese tyres; 2) enhanced product mix (replacement share 74% vs 67%) and 3) RM tailwinds. Company has gained significant market share across segments (500bps for PCR and 350bps for T&B;) and regions. EBITDA grew 61% YoY to Rs 6.95bn with expanded margin at 16.2%...

Apollo Tyres Limited (ATL) Q1FY21 results were ahead of estimates, mainly driven by better-than-expected revenues. A sharp recovery in replacement demand in both domestic as well as the European businesses helped revenue exceed estimates. Operating margins were better than expectations mainly due to employee furlough benefits to the tune of Euro 7 million (Rs 60 cr). The company reported lower than expected loss. With the government opening up the economy, domestic replacement demand has recovered sharply, reporting a 10% y-o-y growth in June 2020 and a 7-8% y-o-y growth in July 2020. As per management the recovery in replacement demand...

Peak net debt, capex spends behind us; FCF in sight ATL's net debt levels ballooned from | 10,000 crore combined in FY16-20. As a result, the company generated negative FCF in each of the past four years. However, with majority of Andhra Pradesh greenfield capex (| 2,200 crore out of | 3,800 crore as of FY20) now behind us, we expect ATL to utilise future cash flows to lower debt levels and thereby improve net profitability. Our estimates place the company turning...

Apollo Tyres Limited (ATL) manufactures tyres and tubes for cars, trucks, farm equipment, and light commercial vehicles. It is one of the leading tyre manufacturing company with well diversified product portfolio and geographical presence. It has a large distribution network in India and in Europe. The company markets...