Apollo Tyres - Q2FY21 Result Update - ICICI Direct

Apollo Tyres (ATL) reported a healthy Q2FY21 performance. Total consolidated total operating income came in at Rs. 4,283 crore, up 7.4% YoY. Within key geographies, revenue from APMEA region came in at Rs. 2,964 crore (up 4.8% YoY), while revenue from Europe region was at Rs. 1,372 crore (up 12.3% YoY, flat in Euro terms). EBITDA in Q2FY20 was at Rs. 695 crore (up 60.8% YoY) with attendant EBITDA margins at 16.2% (up 538 bps YoY); savings across all cost heads. APMEA EBIT margins rose 758 bps YoY to 13.9% while Europe continued to post a loss at EBIT level. Consequent consolidated PAT came in at Rs. 200 crore, up 1.4x YoY.

Valuation & Outlook

We expect sales, PAT CAGR at 7.4%, 25%, respectively in FY20-23E. The company's stated focus on deleveraging and improvement in return ratios going forward is a positive. Given the market share gains across the segment by ATL amid healthy demand prospects, we upgrade ATL from HOLD to BUY, valuing ATL at Rs. 175 i.e. 5.8x EV/EBITDA on FY22E numbers.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ApolloTyres_Q2FY21.pdf

Shares of APOLLO TYRES LTD. was last trading in BSE at Rs.153.5 as compared to the previous close of Rs. 147.8. The total number of shares traded during the day was 1081631 in over 10296 trades.

The stock hit an intraday high of Rs. 157.1 and intraday low of 146.95. The net turnover during the day was Rs. 165673108.

Source : Equity Bulls

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