Result Update: Apollo Tyres (APTY) - ACCUMULATE - TP Rs.261 - Kotak

Impacted by high raw material cost, APTY has reported weak 4QFY17 results. Revenues during the quarter grew at a healthy rate, supported by volume growth in Indian and European operations. Sharp and swift increase in natural rubber impacted margin performance during the quarter. Higher other income and lower tax provision provided some support to net profit. PAT for the quarter declined by 22% YoY. Management remains confident of strong volume growth in FY18. Impact of high raw material prices is expected to be felt in 1QFY18 as well. Further, at European operations, start-up cost of Hungary plant will keep margins subdued. While margins are expected to stay subdued in 1HFY18, we expect gradual improvement from 2HFY18 onwards. We revise our FY18 estimates marginally lower and raise our FY19 estimates. Given recent sharp run-up in stock price, upside from current levels is limited and we thereby rate the stock as ACCUMULATE (BUY earlier) with revised price target of Rs261 (earlier Rs245).

Shares of APOLLO TYRES LTD. was last trading in BSE at Rs.230 as compared to the previous close of Rs. 231.2. The total number of shares traded during the day was 451090 in over 3319 trades.

The stock hit an intraday high of Rs. 235.25 and intraday low of 229.6. The net turnover during the day was Rs. 104823554.

Source : Equity Bulls

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