Apollo Tyres Ltd. share price target

Profitability remains the key in uncertain environment Replacement demand drives Q1 numbers Apollo's standalone net sales slowed down to 1% yoy and 2.7% qoq growth at 30.4 bn. The negative OEM growth was more or less offset by a strong replacement growth both in India and Europe. Truck volume in Replacement grew by 25% yoy, PCR moved up by 12%, while 2W volumes zoomed by ~30% in the quarter leading to a good growth in market share and topline, in...

The government has levied a countervailing duty (CVD) on truck and bus radial tyres originating from China. The duty amounts to 9.117.57% of the tyre's CIF value. The levy is aimed at protecting Indian tyre manufacturers from Chinese players which are subsidized by Chinese Government to promote exports. Chinese tyres form about 10% of the domestic CV tyres market. However, as per our understanding CVD is unlikely to have a material reduction in the Chinese tyre prices. As per The Association of Tyre Manufacturers Association (ATMA), CVD will be triggered in only some instances...

Replacement demand to support amid OEM segment pain! Domestically ATL realises ~60% sales from replacement market, with sizeable ~30% exposure to the OEM market and the remainder 10% from exports. The domestic OEM space is currently witnessing a muted demand scenario owing to a confluence of factors surrounding cost of ownership, with the associated demand pressure impacting auto ancillary players as well. However, strong volume growth registered by OEMs in the past few years would percolate into a ready aftermarket base over the medium term...

European operations that fetch ~30% of revenue, weakend considerably reporting loss at an EBIT level. Consolidated revenue grew by 6% y-o-y driven by an 8% growth in the domestic business (APMEA). Volume growth and price hikes drove growth in the domestic business. The European business recorded flat revenues for the quarter as better realisations on the back of improved...

Apollo's standalone net sales slowed down to 6% yoy while falling by 3.1% qoq to 29.6bn. The yoy growth came on the back of a strong India replacement volume growth, out of which the Truck segment volumes grew at 8% and car segment volumes grew 7%. OEM segment sales remained in negative territory. On a sequential basis, volumes declined as OE segment declined much steeper. The company did not take any price change in Q4 though RM prices started to move down and they had rolled back a price hike last quarter. RM prices saw a drop of 3.7% qoq as the RM price basket showed a benign growth. Hence, at the EBITDA levels, margins improved to 11.8% marginally by 60 bps, while on a yoy basis they still saw a drop of 260 bps. Depreciation moved up by 26% yoy as AP...

India's Q3FY19 CAD moderated to US$ 16.9bn from US$ 19.1bn in Q2FY19 led by lower non-oil imports and improvement in services receipts. Remittances were lower on QoQ basis which was made up by a dip in dividends and interest outflows. On the capital account, FDI inflows were stable and higher banking capital inflows made up for decline in FII inflows and short-term trade credit. With decline in non-oil imports in Q4FY19 and higher FPI inflows, outlook on...

ICICI Securities Ltd | Retail Equity Research Apollo Tyres (ATL) posted a disappointing set of Q3FY19 numbers Consolidated revenues came in at | 4,718 crore (up 16.5% YoY) Consolidated EBITDA increased 6.2% YoY to | 527 crore. EBITDA margins came in at 11.2% (up 20 bps QoQ). Margins came in lower on account of significantly higher raw material cost, partly mitigated by lower employee as well as other expenses Consolidated PAT declined 19.3% YoY to | 197.9 crore...

Domestic market growth strong despite OEM slowdown in Q3 Margins impacted by higher RM costs Apollo's standalone net sales grew by 16% yoy and 0.5% qoq to 30.6bn. The yoy growth came on the back of 11% blended volume growth, out of which the TBR segment volumes grew at double digit yoy, while PCR de-grew in mid-single digit. OEM segment sales declined, however Replacement segment showed a double digit growth on a yoy basis. The company rolled back price hike of 2% (taken earlier in the quarter) viewing lower demand later. RM prices saw a hike of 13% yoy and 2% qoq on rubber price hike as well as fuel price surge during the quarter. Hence, at...

Apollo Tyres (APTL) reported decent set of numbers for Q2FY19. While revenue and operating profit growth came in line with our estimates at 22.5% YoY and 28.2% YoY, the net profit growth was restricted to 4.2% YoY as the company made provision of Rs. 40 cr after IL&FS defaulted on repayment of its deposit.

ICICI Securities Ltd | Retail Equity Research Apollo Tyres' (ATL) Q2FY19 consolidated revenues were at | 4,257 crore (up 22.5% YoY) vs. our estimate of | 4,083 crore. In terms of regions, gross revenues from Asia Pacific Middle East & Africa grew 25.1% YoY to ~| 3,151 crore (supported by volume driven growth of ~25% YoY in Indian operations) while revenue from Europe grew 17.4% YoY to ~| 1,181 crore, led by strong volume & better mix EBITDA margins came in at 11% (up 49 bps YoY; down 134 bps...