Scripscan:Apollo Tyres Ltd
cmp:66
Code:500877
Story:Apollo Tyres Ltd. engages in the manufacture and sale of automobile tires, tubes, and flaps. It produces a range of passenger car, SUV, MUV, light truck, truck-bus, agriculture, industrial, and off-the-road tires; and retreading materials, retreaded tires, and alloy wheels. The company sells its products primarily under the Apollo, Vredestein, and Dunlop brands. It also offers truck-bus tires under the Regal and Kaizen brands; passenger car tires under the Maloya brand; retreaded tires under the brand name of DuraTyres; retreading material under the DuraTread brand; and alloy wheels for passenger cars under the Acelere Wheelz brand name. The company sells its products through branded and multi-product outlets primarily in India, Europe, and South Africa.I remain positive on the tyre industry in view of the structural shift that the industry is going through.I expect the company to deliver a strong revenue CAGR of 22.5% over FY2011–13E, as production ramp-up at the Chennai facility continues as per schedule.I expect the company’s operating margin to improve in FY2013 on gradual softening of raw-material prices. At Rs 66, APTY is trading at attractive levels of 7x FY2013 earnings.Buy it with a medium term price target of 80rs.
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