ICICI Direct's research report on Apollo Tyres
In its virtual investor event, Apollo Tyres (ATL) outlined Vision 2026 targets for key performance parameters. It includes (1) revenues of US$5 billion, (2) EBITDA margins in excess of 15%, (3) pre-tax RoCE of 12-15% & (4) <2x net debt to EBITDA. It reiterated its intent of sweating of assets in the near term, de-leveraging b/s, augmenting capital efficiency and calibrated capex spend.
Outlook
We retain our BUY rating on the stock with a revised target price of Rs 275 valuing it at 6x FY23 EV/EBITDA (earlier TP: Rs 260).
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