Motilal Oswal’s latest research on Apollo Tyres shows the company expects solid export demand and a steady rise in earnings through FY2028.
Key Takeaways
- Domestic demand stayed healthy in Q3 and is likely to continue in Q4.
- Export orders are strong and expected to stay robust.
- Margins in India may be squeezed in the second half because of higher promotional spending.
- European sales remain weak, but Apollo Tyres is outperforming the market on a low base.
- Restructuring of the Enschede plant should boost results from the second half of FY2027.
Earnings Outlook
Motilal Oswal projects a 22% compound annual growth rate (CAGR) in Apollo Tyres’ earnings from FY25 to FY28, based on a corrected starting point.
Valuation
The analyst values the stock at about 16.3 × earnings for FY27 and 14.3 × for FY28, which looks cheap compared with peers. The target price is set at ₹600 per share, reflecting an 18‑times FY27 earnings multiple.
Recommendation
Motilal Oswal keeps a “Buy” call on Apollo Tyres, suggesting investors could benefit from the expected earnings growth and attractive valuation.
Remember, this is just an opinion, not a guarantee. Do your own research before making any investment decisions.