4QFY211Result Update Tyre Apollo Tyres Performance Highlights Y/E March (Standalone) 4QFY11 4QFY1 % chg (yoy) Angel est. % diff. Net sales (` cr) 1,762 1,313 34.2 1,49 18.2 EBITDA (` cr) 146 185 (2.7) 142 3. EBITDA margin (%) 8.3 14.1 (575)bp 9.5 (123)bp Reported PAT (` cr) 66 116 (43.) 49 35.2 Source: Company, Angel Research For 4QFY211, Apollo Tyres reported better-than-expected top line on a standalone as well as consolidated basis, driven by strong volume growth and higher prices. Standalone operating margin came below expectations due to a steep increase in natural rubber prices, while consolidated margin benefitted due to gain of `9cr on account of pension and inventory revaluations. We retain our revenue and earnings estimates for the company and maintain our Buy recommendation on the stock. Standalone results beat estimates: Standalone top line registered strong 34.2% yoy (23% qoq) growth to `1,762cr, led by higher volumes (up 14% yoy) and prices. After three straight quarters of declining volumes, the company reported higher volumes in 4QFY211, led by pick-up in demand in the replacement segment. Operating margin declined considerably by 575bp yoy and 29bp qoq to 8.3% mainly due to the 6% yoy and 16% qoq increase in natural rubber cost. Thus, net profit recorded a sharp 43% yoy decline to `66cr, though sequentially it grew by 22.8%. Noticeably, higher other income and lower tax rate on account of MAT credits positively helped the company s bottom line. Consolidated revenue up 27.4% yoy, net profit rises 1% yoy: Consolidated net revenue grew by 27.4% yoy (15.2% qoq) to `2,73cr due to a 12% yoy increase in volumes and a 15.6% jump in average realisation. In 4QFY211, revenue of South African and European operations grew by 31% and 1% yoy, respectively. Operating margin declined by 215bp yoy to 11.8%, but improved by 24bp qoq. Operating performance benefitted due to gain of `9cr on account of pension and inventory revaluations. Net profit grew by 9.6% yoy (59.4% qoq) to `193cr. Outlook and valuation: We remain positive on the tyre industry in view of the structural shift that the industry is going through. We expect the company to deliver a healthy revenue CAGR of 15.3% over FY211 13E, as the production ramp up at the Chennai facility continues as scheduled. However, volatile raw-material prices are a concern, and we expect margins to remain under pressure. We estimate the company to post EPS of `1.3 in FY213. We maintain our Buy view with a target price of `82, valuing it at 8.x FY213E earnings. Key financials (Consolidated) Y/E March (` cr) FY21 FY211E FY212E FY213E Net sales 8,117 8,868 1,52 11,798 % chg 62.5 9.2 18.6 12.1 Net profit 653.4 44.8 397.1 519.4 % chg 369.5 (32.5) (9.9) 3.8 EBITDA margin (%) 14.6 11. 9.7 1.6 EPS (`) 13. 8.7 7.9 1.3 P/E (x) 5.4 8.1 9. 6.8 P/BV (x) 1.8 1.5 1.3 1.1 RoE (%) 29.8 16.9 13.1 16. RoCE (%) 29.2 15.5 13.1 14.9 EV/Sales (x).6.7.6.5 EV/EBITDA (x) 4.1 6. 5.8 4.6 Source: Company, Angel Research BUY CMP Target Price Investment Period Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Please refer to important disclosures at the end of this report 1 `71 `82 12 Months Tyre 3,556 1.1 89/44 85,142 1 18,585 5,565 APLO.BO APTY@IN Shareholding Pattern (%) Promoters 44.3 MF / Banks / Indian Fls 15.1 FII / NRIs / OCBs 27.3 Indian Public / Others 13.3 Abs. (%) 3m 1yr 3yr Sensex 4.8 8.4 11. Apollo Tyres 38.5 4.3 61.8 Amit Bagaria 22-393578 Ext: 6824 amit.bagaria@angelbroking.com Yaresh Kothari 22-3935 78 Ext: 6844 yareshb.kothari@angelbroking.com
Exhibit 1: Quarterly performance (Standalone) Y/E March (` cr) 4QFY11 4QFY1 % chg FY211 FY21 %chg Net sales 1,762 1,313 34.2 5,491 5,37 9. Consumption of RM 1,262 851 48.3 3,695 3,22 22.3 (% of sales) 71.6 64.8 67.3 6. Staff costs 75 72 4.4 37 289 6. (% of sales) 4.2 5.4 5.6 5.7 Purchases of TG 48 4 2.1 159 152 5.1 (% of sales) 2.7 3. 2.9 3. Other expenses 232 166 39.2 796 789.8 (% of sales) 13.2 12.7 14.5 15.7 Total expenditure 1,615 1,128 43.2 4,957 4,253 16.6 EBITDA 146 185 (2.7) 534 784 (31.9) EBITDA margin (%) 8.3 14.1 9.7 15.6 Interest 44 2 118 149 74 11.9 Depreciation 39 29 32 147 123 2. Other Income 17 9 92.2 26 11 141.6 PBT (excl. extr. Items) 81 144 (43.9) 264 598 (55.9) Exceptional items - - - - - - PBT (incl. extr. Items) 81 144 (43.9) 264 598 (55.9) (% of sales) 4.6 11. 4.8 11.9 Provision for taxation 14 28 (47.8) 65 183 (64.4) (% of PBT) 17.9 19.3 24.8 3.6 Reported PAT 66 116 (43.) 198 415 (52.2) PATM (%) 3.8 8.8 3.6 8.2 Equity capital (cr) 5.4 5.4 5.4 5.4 EPS (`) 1.3 2.3 (43.) 3.9 8.2 (52.2) Source: Company, Angel Research Net revenue up 34.2% yoy, ahead of estimates: The company s standalone top line registered better-than-expected growth of 34.2% yoy to `1,762cr (`1,313cr) in 4QFY211, backed by a strong 14% yoy increase in volumes and a ~17% increase in realisation following the increase in prices. Domestic volumes, which were impacted due to the lockout at the Perambra facility during 1HFY211 and slowdown in the replacement demand for CV tyres in 3QFY211, registered an improved performance during the quarter. For FY211, Apollo Tyres witnessed revenue growth of 9% yoy to `5,491cr, primarily led by a 16% increase in realisation as volumes declined by 7%. The replacement segment contributed 66% to the company s top line, while contribution of OEM and exports stood at 26% and 8%, respectively. 2
Exhibit 2: Net sales up 34.2% yoy (`cr) Net sales yoy change (RHS) (%) 2, 46.5 5 1,8 1,6 4 1,4 34.2 3 1,2 24.3 1, 18.2 2 8 6 9.7 8.2 1 4 2 (5.) (3.7) (1) 1QFY1 2QFY1 3QFY1 4QFY1 1QFY11 2QFY11 3QFY11 4QFY11 Source: Company, Angel Research; Note: Standalone performance Operating margin declined to 8.3% due to higher natural rubber prices: On the operating front, the company reported a substantial 575bp yoy and 29bp qoq contraction in operating margin to 8.3%. The decline in margin can be attributed to the 6% yoy and 16% qoq increase in the cost of natural rubber. As a result, raw-material cost as a percentage of net sales jumped by 68bp yoy to 71.6% in 4QFY211 vs. 64.8% in 4QFY21. However, the decline in staff cost during the quarter arrested the margin contraction to a certain extent. As a result, operating profit fell by 2.7% yoy to `146cr. Exhibit 3: Average raw-material cost trend Particulars 4QFY11 4QFY1 %chg (yoy) 3QFY11 %chg (qoq) Nylon Tyre Cord Fabric 225 195 15.4 225. Natural Rubber 23 14 64.3 185 24.3 Carbon Black 57 5 14. 55 3.6 Source: Company, Angel Research Exhibit 4: Continuous rise in natural rubber prices... Exhibit 5:...leads to EBITDA margin contraction (`/kg) 25 2 15 1 12 135 78 72 98 12 118 141 165 177 194 225 (%) EBITDA margin Raw material cost/sales 8 67.8 68.2 64.7 67.1 69.3 7 58.8 6.1 6 5 4 74.3 5 3 2 1 16.4 16.4 15.5 14.1 1.4 1.3 1.4 8.3 1QFY9 2QFY9 3QFY9 4QFY9 1QFY1 2QFY1 3QFY1 4QFY1 1QFY11 2QFY11 3QFY11 4QFY11 1QFY1 2QFY1 3QFY1 4QFY1 1QFY11 2QFY11 3QFY11 4QFY11 Source: Company, Crisil Research, Angel Research Source: Company, Angel Research; Note: Standalone performance 3
Net profit at `66cr, down 43% yoy: Net profit registered a steep decline of 43% yoy to `66cr, higher than our estimate of `49cr. The decline in profitability was largely due to margin contraction at the operating level. Higher interest cost and depreciation also negatively affected the company s bottom-line performance. However, lower tax outgo on account of MAT credits and higher other income benefitted the bottom line to a large extent. Exhibit 6: Net profit dips on margin contraction (` cr) Net profit Net profit margin (RHS) (%) 14 1 8.8 8.4 8. 9 12 7.7 8 1 7 8 6 6 4 3.6 5 3.8 3.2 3.8 4 3 2 2 1 1QFY1 2QFY1 3QFY1 4QFY1 1QFY11 2QFY11 3QFY11 4QFY11 Source: Company, Angel Research; Note: Standalone performance 4
Exhibit 7: Quarterly performance (Consolidated) Y/E March (` cr) 4QFY11 4QFY1 % chg FY211 FY21 %chg Net sales 2,73 2,143 27.4 8,868 8,121 9.2 Consumption of RM 1,592 1,22 32.4 4,821 4,152 16.1 (% of sales) 58.3 56.1 54.4 51.1 Staff costs 25 297 (15.8) 1,155 1,88 6.1 (% of sales) 9.2 13.9 13. 13.4 Purchases of TG 149 18 37.3 481 429 12.2 (% of sales) 5.5 5.1 5.4 5.3 Other expenses 417 237 76. 1,432 1,277 12.2 (% of Sales) 15.3 11.1 16.2 15.7 Total expenditure 2,48 1,845 3.5 7,89 6,946 13.6 EBITDA 321 298 7.7 978 1,175 (16.8) EBITDA margin (%) 11.8 13.9 11. 14.5 Interest 54 13 332.7 185 115 6.5 Depreciation 74 64 14.8 272 254 7. Other Income 17 13 27.7 26 21 23.2 PBT (excl. extr. items) 21 235 (1.4) 547 827 (33.8) Exceptional Items - (87) - - (87) - PBT (incl. extr. items) 21 322 (34.7) 547 914 (4.1) (% of sales) 7.7 15. 6.2 11.3 Provision for taxation 18 59 (7.3) 16 261 (59.2) (% of PBT) 8.4 18.4 19.4 28.5 Share in loss/(profit) of associates - - - 1 - - Minority interest () - - () - - Reported PAT 193 263 (26.8) 44 653 (32.6) Adjusted PAT 193 176 9.6 44 566 (22.2) PATM (%) 7.1 8.2 5. 7. Equity capital 5.4 5.4 5.4 5.4 Reported EPS (`) 3.8 5.2 (26.8) 8.7 13. (32.6) Adjusted EPS (`) 3.8 3.5 9.6 8.7 11.2 (22.2) Source: Company, Angel Research Consolidated performance: Net revenue reported strong 27.4% yoy and 15.2% qoq to `2,73cr on the back of better-than-expected performance in domestic markets and improvement in operations at the South African subsidiary. Overall performance was aided by a 12% yoy increase in volumes to 125,MT and a ~16% yoy jump in realisation. Revenue of South Africa operations increased by 31% yoy to `354cr, while Europe reported 1% yoy growth to `623cr. Operating margin at the consolidated level declined by 215bp yoy mainly due to increased raw-material cost pressures. However, sequentially, the operating margin improved marginally by 24bp. Operating performance during the quarter benefitted due to gain of `9cr on account of pension and inventory revaluations. Net profit increased by 9.6% yoy and 59.4% qoq to `193cr. 5
Conference call Key highlights Raw-material costs and pricing action by the company: During 4QFY211, natural rubber prices increased by ~6% yoy and ~16% qoq. Average rubber prices for the company during the quarter stood at `23/kg compared to `185/kg in 3QFY211 and `14/kg in 4QFY21. Prices of NTC fabric and carbon black increased by ~15% and ~14% yoy, respectively. On account of the continuous increase in raw-material prices, the company hiked its product prices in the domestic market by ~17% in FY211. However, the company was unable to pass on the entire hike in raw-material prices. Further, with rubber prices ruling at new highs, the company is contemplating another hike in its product prices. Current capacity details: The company s capacity in India, South Africa and Europe stands at 95MT/day, 175MT/day and 15MT/day, respectively. The ramp-up at the Chennai facility is progressing as per the schedule, with current production at 15MT/day, and is expected to reach 4MT/day by the end of FY212 and to 45MT/day by 1QFY213. For FY212, the company plans to incur overall capex of ~`1,cr. The Indian operations will see capex of `7cr `8cr. Capex of ~`1cr each will be incurred at the South African and European facilities. The company s net debt, on a consolidated basis, stood at `2,3cr as of March 31, 211. Capacity utilisation at domestic and European facilities currently stands at ~95%. Capacity utilisation of the South African facility is at ~9%. 6
Investment arguments Tyre industry set for a structural shift: Currently, manufacturing radial tyres is far more capital intensive than manufacturing cross-ply tyres. Investment required for radial tyres per tpd is 3.2x that of cross-ply tyres at `6.1cr/tpd. On the other hand, the selling price of radial tyres is ~2% higher than that of cross-ply tyres. Thus, to generate similar RoCE and RoE, tyre companies would need to earn EBITDA margins of ~21% compared to ~9% earned on cross-ply tyres, considering the difference in the capital requirements and consequent impact on asset turnover, interest cost and depreciation. Therefore, higher capital requirements will help protect margins from upward-bound input costs, as the business model evolves bearing in mind final RoEs rather than margins. With the sector set for a structural shift and the apparent pricing flexibility, RoCE and RoE of tyre manufacturers are expected to improve going forward. Riding on high domestic demand: The Indian tyre industry is witnessing strong demand from the replacement as well as OEM markets, keeping capacities running at peak. Apollo is poised to achieve market leadership on the back of increasing production from 82tpd in FY21 to ~1,3tpd in FY212E. Strategic overseas investment offers synergies in the long term: Acquisitions done by the company in the last two-three years are increasingly contributing to its revenue. We estimate Vredestein Banden combined with Dunlop SA to contribute 3% to the company s overall consolidated revenue, helping it to further strengthen its foothold in the Indian tyre industry. Acquisitions offer synergies by way of access to radial tyre technology, wider product portfolio and presence in newer geographies. Outlook and valuation We remain positive on the tyre industry in view of the structural shift that the industry is going through. We expect the company to deliver a healthy revenue CAGR of 15.3% over FY211 13E, as it continues to ramp up production at the Chennai facility as per the planned schedule. However, volatile raw-material prices are a concern, and we expect the company s margins to be under pressure. We expect the company to post EPS of `1.3 in FY213. We maintain our Buy view on the stock with a target price of `82, based on 8.x FY213E earnings. Key downside risk to our call: A sharp rise in input costs from current levels, slower growth in international business and lower-than-anticipated growth in tyre offtake pose downside risks to our estimates. 7
Exhibit 8: Angel vs. consensus forecast Angel estimates Consensus Variation (%) FY12E FY13E FY12E FY13E FY12E FY13E Net sales (` cr) 1,52 11,798 1,774 12,332 (2.4) (4.3) EPS (`) 7.9 1.3 8.6 1.4 (8.4) (.9) Source: Bloomberg, Angel Research Exhibit 9: One-year forward P/E band (`) Share Price (`) 1x 4x 7x 1x 14 12 1 8 6 4 2 Exhibit 1: One-year forward P/E chart (x) One-yr forward P/E Five-yr average P/E 2 18 16 14 12 1 8 6 4 2 Apr-3 Sep-3 Feb-4 Aug-4 Jan-5 Jun-5 Dec-5 May-6 Nov-6 Apr-7 Sep-7 Mar-8 Aug-8 Jan-9 Jul-9 Dec-9 Jun-1 Nov-1 May-11 Jul-5 Jan-6 Jun-6 Nov-6 May-7 Oct-7 Mar-8 Sep-8 Feb-9 Jul-9 Jan-1 Jun-1 Nov-1 May-11 Source: Company, Bloomberg, Angel Research Source: Company, Bloomberg, Angel Research Exhibit 11: One-year forward EV/EBITDA band (` cr) EV (`cr) 2x 4x 6x 8x 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Exhibit 12: One-year forward EV/EBITDA chart (x) One-yr forward EV/EBITDA Five-yr average EV/EBITDA 8 7 6 5 4 3 2 1 Apr-3 Sep-3 Feb-4 Aug-4 Jan-5 Jun-5 Dec-5 May-6 Nov-6 Apr-7 Sep-7 Mar-8 Aug-8 Jan-9 Jul-9 Dec-9 Jun-1 Nov-1 May-11 Jul-5 Jan-6 Jun-6 Nov-6 May-7 Oct-7 Mar-8 Sep-8 Feb-9 Jul-9 Jan-1 Jun-1 Nov-1 May-11 Source: Company, Bloomberg, Angel Research Source: Company, Bloomberg, Angel Research Exhibit 13: Tyre - Recommendation summary Company Reco. CMP (`) Tgt. price (`) Upside (%) P/E (x) EV/EBITDA (x) RoE (%) FY1-13E EPS FY12E FY13E FY12E FY13E FY12E FY13E CAGR (%) Apollo Tyres* Buy 71 82 16.8 9. 6.8 5.8 4.6 13.1 16. (7.4) Ceat Buy 99 135 36.5 6.9 3.3 9.1 6. 7.4 15.2 (14.7) JK Tyre* Buy 93 133 43.1 5.8 3.1 5.5 4.5 7.1 12. (17.9) Source: Company, Angel Research; Note: * FY212E and FY213E EPS on consolidated basis 8
Profit and Loss Statement (Consolidated) Y/E March (` cr) FY8 FY9 FY1 FY11E FY12E FY13E Net Sales 4,695 4,995 8,117 8,868 1,52 11,798 Total operating income 4,695 4,995 8,117 8,868 1,52 11,798 % chg 9.4 6.4 62.5 9.2 18.6 12.1 Total Expenditure 4,98 4,573 6,933 7,89 9,497 1,55 Net Raw Materials 2,929 3,411 4,577 5,32 6,772 7,47 Other Mfg costs 338 337 542 62 642 72 Personnel 44 415 1,88 1,155 1,231 1,393 Other 39 41 726 831 852 967 EBITDA 597 422 1,184 978 1,24 1,247 % chg 49.5 (29.3) 18.4 (17.4) 4.6 21.9 (% of Net Sales) 12.7 8.5 14.6 11. 9.7 1.6 Depreciation & Amortisation 13 129 254 272 316 378 EBIT 467 294 93 76 77 869 % chg 65.6 (37.2) 216.5 (24.).1 22.9 (% of Net Sales) 1. 5.9 11.5 8. 6.7 7.4 Interest & other charges 89 112 134 185 197 198 Other Income 26 31 119 26 2 21 (% of PBT) 6.5 14.7 12.9 4.8 3.7 3.1 Recurring PBT 45 213 914 547 529 692 % chg 16.4 (47.3) 328.3 (4.1) (3.2) 3.8 Extraordinary Items () (1) (3) - - - PBT 46 214 917 547 529 692 Tax 136 74 261 16 132 173 (% of PBT) 33.4 34.7 28.4 19.4 25. 25. PAT 27 14 657 441 397 519 Adj. PAT 27 139 653 441 397 519 % chg 13.4 (48.4) 369.5 (32.5) (9.9) 3.8 (% of Net Sales) 5.7 2.8 8. 5. 3.8 4.4 Basic EPS (`) 5.5 2.8 13. 8.7 7.9 1.3 Fully Diluted EPS (`) 5.5 2.8 13. 8.7 7.9 1.3 % chg 118.9 (5.) 369.5 (32.5) (9.9) 3.8 9
Balance Sheet (Consolidated) Y/E March (` cr) FY8 FY9 FY1 FY11E FY12E FY13E SOURCES OF FUNDS Equity Share Capital 49 5 5 5 5 5 Preference Capital - - - - - - Reserves & Surplus 1,129 1,299 1,917 2,362 2,761 3,191 Shareholders Funds 1,178 1,35 1,968 2,413 2,811 3,242 Minority Interest - - - 1 1 1 Total Loans 646 891 1,77 2,48 2,48 2,48 Deferred Tax Liability 176 194 251 316 316 316 Total Liabilities 2, 2,435 3,926 5,21 5,68 6,39 APPLICATION OF FUNDS Gross Block 1,955 2,284 5,563 6,942 7,91 8,397 Less: Acc. Depreciation 75 882 3,12 3,392 3,79 4,86 Net Block 1,25 1,42 2,443 3,55 4,21 4,31 Capital Work-in-Progress 95 281 536 347 395 42 Goodwill 22 24 118 125 125 125 Investments 5 5 6 11 17 21 Current Assets 1,484 1,423 2,439 3,29 3,18 3,579 Cash 285 362 349 191 132 242 Loans & Advances 171 26 31 395 421 472 Other 1,28 855 1,78 2,74 2,555 2,865 Current liabilities 811 7 1,614 2,113 2,238 2,416 Net Current Assets 673 723 824 1,177 87 1,163 Mis. Exp. not written off - - - - - - Total Assets 2, 2,435 3,926 5,21 5,68 6,39 1
Cash Flow Statement (Consolidated) Y/E March (` cr) FY8 FY9 FY1 FY11E FY12E FY13E Profit before tax 46 214 917 547 529 692 Depreciation 13 129 254 272 316 378 Change in Working Capital 14 (67) 97 369 (246) 188 Less: Other income 19 (36) (421) 554 (744) 226 Direct taxes paid 136 74 261 16 132 173 Cash Flow from Operations 313 58 1,428 528 1,212 86 (Inc.)/Dec. in Fixed Assets (18) (517) (3,533) (1,19) (1,16) (511) (Inc.)/Dec. in Investments (1) (5) (6) (4) (Inc.)/Dec. in loans and adv. 18 (28) (111) (85) 26 51 Other income 26 31 119 26 2 21 Cash Flow from Investing 27 (513) (3,527) (1,255) (976) (443) Issue of Equity 72 46 Inc./(Dec.) in loans (177) 245 816 773 Dividend Paid (Incl. Tax) 29 27 44 29 44 88 Others (173) (234) 1,225 (234) (34) (395) Cash Flow from Financing (249) 83 2,86 569 (259) (37) Inc./(Dec.) in Cash 91 77 (13) (158) (59) 11 Opening Cash balance 194 285 362 349 191 132 Closing Cash balance 285 362 349 191 132 242 11
Key Ratios Y/E March FY8 FY9 FY1 FY11E FY12E FY13E Valuation Ratio (x) P/E (on FDEPS) 12.8 25.6 5.4 8.1 9. 6.8 P/CEPS 8.6 13.3 3.9 5. 5. 4. P/BV 2.9 2.6 1.8 1.5 1.3 1.1 Dividend yield (%).7.6 1.1.7 1.1 2.1 EV/Sales.8.8.6.7.6.5 EV/EBITDA 6.4 9.7 4.1 6. 5.8 4.6 EV / Total Assets 1.9 1.7 1.3 1.1 1. 1. Per Share Data (`) EPS (Basic) 5.5 2.8 13. 8.7 7.9 1.3 EPS (fully diluted) 5.5 2.8 13. 8.7 7.9 1.3 Cash EPS 8.2 5.3 18.1 14.1 14.2 17.8 DPS.5.4.7.5.8 1.5 Book Value 24.1 26.8 39. 47.9 55.8 64.3 DuPont Analysis EBIT margin 1. 5.9 11.5 8. 6.7 7.4 Tax retention ratio.7.7.7.8.8.8 Asset turnover (x) 2.7 2.6 2.9 2.1 2. 2.1 RoIC (Post-tax) 18.1 1.1 23.6 13.2 1.1 11.6 Cost of Debt (Post Tax) 8. 9.5 7.4 7.1 6. 6. Leverage (x).5.3.6.8.9.8 Operating RoE 22.8 1.3 32.7 18.3 13.8 15.8 Returns (%) RoCE (Pre-tax) 23.9 13.2 29.2 15.5 13.1 14.9 Angel RoIC (Pre-tax) 27.3 14.2 26. 14.1 12.9 15. RoE 21.3 8.4 29.8 16.9 13.1 16. Turnover ratios (x) Asset Turnover (Gross Block) 2.4 2.4 2.1 1.4 1.4 1.4 Inventory / Sales (days) 53 49 36 57 52 52 Receivables (days) 26 2 23 36 37 37 Payables (days) 58 47 43 62 63 62 WC cycle (ex-cash) (days) 28 27 19 3 3 26 Solvency ratios (x) Net debt to equity.3.4.7.9.8.7 Net debt to EBITDA.6 1.2 1.1 2.3 2.3 1.8 Interest Coverage (EBIT/Interest) 5.3 2.6 6.9 3.8 3.6 4.4 12
Research Team Tel: 22-3935 78 E-mail: research@angelbroking.com Website: www.angelbroking.com DISCLAIMER This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report. Disclosure of Interest Statement Apollo Tyres 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock Yes 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors. Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%) 13