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• Leading tyre manufacturer in India with the highest market
share in truck tyres. In FY04-FY10, it achieved a 39% higher
EBITDA/MT than its competitors.
•In rising raw material cost scenario, Apollo Tyres
protected its contribution margin and its EBITDA margins
decline was far less severe compared to its competitors.
•Radial tyre industry in India likely to be capacity
constrained even with modest growth in CV tyre volumes.
• Apollo Tyres has made profitable, EPS accretive acquisition,
even at the peak of credit crisis.
• Key assumptions: 1) Raw material costs stabilize after steep
appreciative over last one year – we expect that natural
rubber and synthetic rubber costs stabilize at current levels,
and 2) Domestic volumes assumed to grow at modest 5%
CAGR over FY10-FY15E.
• Shareholding: Promoter - 44%.
Valuation: Multiple based approach; valuing Indian business at
4.5x EV/EBITDA and international business at 5.5x EV/EBITDA
on Sept 2012 financials. Implied PE at target price – 8.7x.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
• Leading tyre manufacturer in India with the highest market
share in truck tyres. In FY04-FY10, it achieved a 39% higher
EBITDA/MT than its competitors.
•In rising raw material cost scenario, Apollo Tyres
protected its contribution margin and its EBITDA margins
decline was far less severe compared to its competitors.
•Radial tyre industry in India likely to be capacity
constrained even with modest growth in CV tyre volumes.
• Apollo Tyres has made profitable, EPS accretive acquisition,
even at the peak of credit crisis.
• Key assumptions: 1) Raw material costs stabilize after steep
appreciative over last one year – we expect that natural
rubber and synthetic rubber costs stabilize at current levels,
and 2) Domestic volumes assumed to grow at modest 5%
CAGR over FY10-FY15E.
• Shareholding: Promoter - 44%.
Valuation: Multiple based approach; valuing Indian business at
4.5x EV/EBITDA and international business at 5.5x EV/EBITDA
on Sept 2012 financials. Implied PE at target price – 8.7x.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
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