Apollo Tyres is trading at ~15x FY25E earnings vs ~7% EPS CAGR during FY24E-FY26E. As against ~6% India volume CAGR over FY24-26E, we expect India EBITDAM/FCF/RoCE to remain steady during the same period, with business remaining exposed to the mean reversion in GM.
Some analysts believe that Apollo Tyres is focused on improving profitability over market share gain, while others say that current margins are difficult to sustain and rich valuations are capping the gains.
Apollo Tyres shares: declined 4.46 per cent to Rs 364.55 on BSE. The stock was up 15 per cent in the last 10 session and gained continuously in the previous five sessions.