Apollo Tyres - On Track To Achieve Vision 2026: HDFC Securities

HDFC Securities Institutional Equities

Over the last few years, there has been a noticeable change at Apollo Tyres Ltd. From a focus on gaining market share, it is now clearly seen working towards its Vision 2026, which amongst other things, targets to achieve a return on capital employed of 12- 15% on a sustainable basis.

Some of the key initiatives undertaken include a rising focus on premiumisation both in India and Europe, a conscious decision to exit certain stock keeping units which are not remunerative, a focus on increased use of digital tools to improve operational efficiencies and an ever-rising focus on sweating existing assets and hence targeting a much lower annual capex.

Further, pricing discipline in the domestic tyre industry has led to a much reduced earnings volatility to change in input costs and has hence improved earnings visibility for the industry.

Given this, we remain confident that Apollo is on track towards achieving Vision 2026 - its RoCE has already improved to 10% in FY23 from 4.9% in FY20.

The stock has recently underperformed relative to peers despite its strong financial performance and appears attractive at 11.6 times FY25 earnings per share.

Reiterate 'Add', with a revised target price of Rs 415 (earlier Rs 404) as we roll forward to September-2025 (from June 2025 earlier).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.