Apollo Tyres Ltd. share price target

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.