APOLLOTYRE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.4
| Stock Code | APOLLOTYRE | Market Cap | 32,539 Cr. | Current Price | 512 ₹ | High / Low | 540 ₹ |
| Stock P/E | 42.2 | Book Value | 170 ₹ | Dividend Yield | 0.98 % | ROCE | 9.80 % |
| ROE | 6.28 % | Face Value | 1.00 ₹ | DMA 50 | 505 ₹ | DMA 200 | 489 ₹ |
| Chg in FII Hold | 0.36 % | Chg in DII Hold | -0.04 % | PAT Qtr | 279 Cr. | PAT Prev Qtr | 223 Cr. |
| RSI | 54.8 | MACD | -2.96 | Volume | 13,97,677 | Avg Vol 1Wk | 8,62,932 |
| Low price | 368 ₹ | High price | 540 ₹ | PEG Ratio | 1.12 | Debt to equity | 0.31 |
| 52w Index | 83.7 % | Qtr Profit Var | 66.8 % | EPS | 12.2 ₹ | Industry PE | 30.2 |
📊 Analysis: APOLLOTYRE shows moderate fundamentals. ROE at 6.28% and ROCE at 9.80% are relatively weak, indicating limited capital efficiency. Debt-to-equity at 0.31 is manageable but adds financial risk. EPS of ₹12.2 is modest, and dividend yield of 0.98% provides limited income support. The P/E of 42.2 is significantly higher than the industry average of 30.2, suggesting stretched valuations. The PEG ratio of 1.12 indicates fair valuation relative to growth. Quarterly PAT growth (279 Cr vs 223 Cr) shows strong earnings momentum (+66.8%). Technicals are neutral: RSI at 54.8, MACD negative (-2.96), and price trading above DMA 50 and DMA 200, signaling consolidation with mild bullish undertone. Strong 52-week index return (83.7%) highlights past performance strength, but valuations remain a concern.
💡 Entry Price Zone: Ideal accumulation range is between ₹470 – ₹490, closer to DMA 200 support levels, offering better valuation comfort.
⏳ Exit / Holding Strategy: If already holding, maintain a medium-term horizon (2–3 years) but monitor profitability improvements. Exit or partial profit booking should be considered near ₹530–₹540 resistance levels if valuations stretch further without significant ROE/ROCE improvement.
Positive ✅
- Quarterly PAT growth of 66.8% highlights strong earnings momentum.
- Debt-to-equity ratio of 0.31 is manageable.
- Dividend yield of 0.98% provides modest income support.
- FII holdings increased by 0.36%, reflecting foreign investor confidence.
- Strong 52-week index return of 83.7% shows robust past performance.
Limitation ⚠️
- Weak ROE (6.28%) and ROCE (9.80%).
- High P/E (42.2) compared to industry average (30.2).
- EPS of ₹12.2 is modest relative to price.
- Dividend yield below 1% is limited for income investors.
- MACD negative, signaling weak technical momentum.
- DII holdings decreased (-0.04%), showing reduced domestic institutional confidence.
Company Negative News 📉
- High valuation multiples with weak ROE/ROCE raise concerns about sustainability.
Company Positive News 📈
- Strong quarterly profit growth supports earnings consistency.
- FII confidence increased with higher holdings.
- Strong 52-week performance highlights investor interest.
Industry 🌐
- Industry P/E at 30.2 indicates moderate valuation levels.
- Automobile and tyre sector benefits from rising demand in passenger and commercial vehicles.
Conclusion 📝
APOLLOTYRE is a moderately attractive stock with strong earnings momentum and manageable debt, but faces challenges with weak ROE/ROCE and stretched valuations. Investors should accumulate near ₹470–₹490 for better risk-adjusted returns. Existing holders should maintain a 2–3 year horizon, with partial profit booking near ₹530–₹540 resistance levels unless profitability metrics improve significantly.