APOLLOTYRE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.5

Let’s peel back the layers of Apollo Tyres Ltd. (APOLLOTYRE) — a solid automotive ancillary play with stable fundamentals, moderate returns, and a decent valuation setup, though facing near-term profitability pressures.

💹 Core Financials Overview

Profitability & Returns

EPS: ₹17.7, ROE: 8.61%, ROCE: 11.4% — healthy, but not standout, indicating moderate efficiency in capital deployment.

Quarterly PAT Decline: -30.1% — sharp drop warrants attention to cost pressures or margin squeeze, possibly due to input inflation or demand moderation.

Leverage & Distribution

Debt-to-Equity: 0.30 — well-managed; indicates no financial stress.

Dividend Yield: 1.10% — reasonable payout for income-seeking holders.

📊 Valuation Metrics

Metric Value Viewpoint

P/E Ratio 23.4 Discounted vs Industry PE: 33.9 — valuation comfort exists

P/B Ratio ~1.97 Reasonable vs Book Value ₹232

PEG Ratio 0.94 ✅ Near fair value, signals balanced price-growth outlook

Intrinsic Value ❌ Slightly Below CMP May limit short-term upside unless earnings stabilize

🧠 Business Model & Competitive Edge

Leading player in tyre manufacturing for passenger, commercial, and off-highway vehicles, with global footprints across India and Europe.

Value lies in OEM relationships, export channels, and brand equity in replacement markets.

Recent challenges likely include raw material volatility, global slowdown in auto sales, and pressure on margins.

Institutional trends mixed

FII ↓ 1.16% — suggests foreign caution.

DII ↑ 1.03% — domestic funds finding value at current levels.

📉 Technical Outlook

RSI: 48.8 — neutral, neither oversold nor overbought.

MACD: -1.29 — bearish crossover, momentum cooling off.

CMP ₹456 is around DMA 50 (₹458) & DMA 200 (₹463) — trading range-bound.

Stock is ~22% off high ₹585, showing potential re-rating if fundamentals improve.

🎯 Entry Zone & Long-Term Strategy

Suggested Entry Zone: ₹420–₹440 — ideal for accumulation on weakness or sector pullback.

Long-Term Holding Thesis

Look for operational efficiency, margin improvement, and stable demand recovery.

Suitable for medium-horizon investors comfortable with auto sector cycles.

Watch for capex plans, input cost volatility, and expansion in premium product lines.

Want me to create a head-to-head comparison with JK Tyre, MRF, or CEAT to spotlight relative value and capital efficiency? I can distill it into a quick performance matrix for decision clarity 🔧📊.

Edit in a page