Apollo Tyres
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Transcript of Apollo Tyres
Please refer to important disclosures at the end of this report 1
Y/E March (Rs cr) 1QFY11 1QFY10 % chg (yoy) Angel Est. % Diff.
Net Sales 1,121 1,180 (5.0) 1,204 (6.9)
Operating Profit 117 194 (39.8) 130 (10.1)
OPM (%) 10.4 16.4 (603)bp 10.8 (37)bp
Reported PAT 41 95 (57.1) 55 (26) Source: Company, Angel Research
Apollo Tyres reported modest results for 1QFY2011, despite a sharp jump in rubber prices and lockout at one of its plant. Standalone top-line registered a decline of 5% yoy to Rs1,121cr (Rs1,180cr) in 1QFY2011. Tonnage sold for the quarter declined 20% qoq to 66,000MT on account of the lockout at its Permabra facility due to labor unrest. The Perambara plant shut down resulted in revenue loss of around ~Rs300cr (15,000MT of production loss) during the quarter. On the operating front, the company reported 603bp yoy contraction in operating margin at 10.4% (16.4%). During 1QFY2010, net profit registered a substantial decline of 57.1% to Rs40.6cr (Rs95cr).
Decent consolidated performance: The company however, reported healthy performance at the consolidated level with both the subsidiaries reporting good growth and also supported the company’ overall OPM. On a consolidated basis, the company recorded 11.4% yoy jump in top-line and marginal 1% increase in net profit at Rs74cr. Consolidated tonnage volume for the quarter was 93,000MT. Operating margins at the consolidated level stood at 10.9% (12.6%) in 1QFY2011.
Outlook and Valuation: The tyre industry, during FY2010, benefited largely from the substantial decline in raw material prices and spike in replacement demand. Going ahead, we are positive on the sector as the OEM off-take is expected to improve on better overall auto industry volume growth. The recent run up in raw material prices is however, a concern and expected to exert pressure on OPMs. We expect the company to clock EPS of Rs7.9 in FY2011E and Rs9.8 in FY2012E. We believe that strong demand, prevailing high capacity utilisation levels and higher investment requirements, would help the Indian tyre Industry to arrest the sharp decline in margins despite the upward move in input costs (rubber and carbon black). Thus, we maintain a Buy on Apollo Tyres, with a Target Price of Rs79, at which level the stock would trade at 8x, 5x and 1.4x FY2012E EPS, EV/EBITDA and P/BV, respectively.
Key Financials (Consolidated)
Y/E March (Rs cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 4,995 8,117 9,260 10,398
% chg 6.4 62.5 14.1 12.3
Net Profit 139.2 653.4 399.2 495.9
% chg (48.4) 369.5 (38.9) 24.2
OPM (%) 8.5 14.6 10.1 10.6
EPS (Rs) 2.8 13.0 7.9 9.8
P/E (x) 23.2 4.9 8.1 6.5
P/BV (x) 2.4 1.6 1.3 1.1
RoE (%) 16.2 24.0 24.1 16.9
RoCE (%) 13.2 29.2 13.9 14.9
EV/Sales (x) 0.8 0.6 0.5 0.5
EV/EBITDA (x) 8.9 3.9 5.3 4.4
Source: Company, Angel Research
BUY CMP Rs64 Target Price Rs79
Investment Period 12 Months Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters 39.8
MF / Banks / Indian Fls 18.3
FII / NRIs / OCBs 29.3
Indian Public / Others 12.6
Abs. (%) 3m 1yr 3yr
Sensex 1.8 16.1 17.1
Apollo Tyres (8.1) 60.0 66.1
5,368
APLO.BO
3,221
0.9
83/38
1,254,170
Market Cap (Rs cr)
Beta
52 Week High / Low
1
17,868
APTY@IN
Face Value (Rs)
BSE Sensex
Nifty
Reuters Code
Tyre
Avg. Daily Volume
Vaishali Jajoo 022-4040 3800 Ext: 344
Yaresh Kothari 022-4040 3800 Ext: 313 [email protected]
Apollo Tyres Performance Highlights
1QFY2011Result Update | Tyre
July 30, 2010
Apollo Tyres |1QFY2011 Result Update
2July 30, 2010
Exhibit 1: Quarterly Performance (Standalone) Y/E March (Rs cr) 1QFY11 1QFY10 % chg FY10 FY09 %chg
Net Sales 1,121 1,180 (5.0) 5,037 4,072 23.7
Consumption of RM 737 663 11.2 3,022 2,821 7.1
(% of Sales) 65.8 56.2
60.0 69.3
Staff Costs 77.4 62.6 23.6 289.5 207.6 39.5
(% of Sales) 6.9 5.3
5.7 5.1
Purchases of TG 27 30 (10.9) 152 116 30.6
(% of Sales) 2.4 2.5
3.0 2.9
Other Expenses 163 230 (29.2) 789 601 31.4
(% of Sales) 14.5 19.5
15.7 14.8
Total Expenditure 1,004 986 1.9 4,253 3,746 13.5
Operating Profit 117 194 (39.8) 784 326 140.6
OPM (%) 10.4 16.4
15.6 8.0
Interest 25.9 20.3 27.8 74.0 66.8 10.6
Depreciation 34.1 31.2 9.6 122.8 98.0 25.3
Other Income 1 1 (7.7) 11 10 7.9
PBT (excl. Extr. Items) 57 143 (59.9) 598 171 249.5
Exceptional Items - - - - - -
PBT (incl. Extr. Items) 57.5 143.4 (59.9) 598.2 171.2 249.5
(% of Sales) 5.1 12.2
11.9 4.2
Provision for Taxation 16.9 48.8 (65.3) 183.2 63.1 190.6
(% of PBT) 29.4 34.0
30.6 36.8
Reported PAT 40.6 94.7 (57.1) 415.0 108.1 283.8
PATM (%) 3.6 8.0
8.2 2.7
Equity capital (cr) 50.4 50.4
50.4 50.4
EPS (Rs) 0.8 1.9 (57.1) 8.2 2.1 283.8
Source: Company, Angel Research
Top-line declines 5% yoy, lockout at Perambra impacts volume: Standalone top-line registered a decline of 5% yoy to Rs1,121cr (Rs1,180cr) in 1QFY2011, came in below our estimates. Tonnage sold for the quarter declined 20% qoq to 66,000MT on account of the Perambra plant lockout due to labour unrest. The plant shut down resulted in revenue loss of around ~Rs300cr (15,000MT of production loss) during the quarter. However, price hikes taken during the quarter - 5% in April 2010 in the OE segment and 7% in replacement segment - arrested further decline in top-line.
Apollo Tyres |1QFY2011 Result Update
3July 30, 2010
Exhibit 2: Top-line declines on lock-out at Perambra facility
Source: Company, Angel Research
OPM at 10.4%, contraction of 603bp on increase in rubber price: On the operating front, the company reported 603bp yoy contraction in operating margin at 10.4% (16.4%) during 1QFY2011, on a standalone basis. In absolute terms, operating profit fell by 40% yoy to Rs117cr (Rs194cr). Apollo’s subdued performance on the operating front was largely on account of the substantial increase in raw material costs to the extent of 939bp yoy following sharp rise in cost its key raw material - rubber. Despite the increase in product prices, the company is not yet fully covered. Average rubber price for the company for 1QFY2011 stood at Rs165/kg (Rs140/kg in 4QFY2010 and Rs100 in 1QFY2010). However, fall in other expenditure by a substantial 496bp yoy restricted further fall in operating profit.
Exhibit 3: Average raw material cost/kg trend Particulars 1QFY11 4QFY10 % qoq chg
Nylon Tyre Cord Fabric 205 195 5.1
Natural Rubber 165 140 17.9
Carbon Black 52 50 4.0
Source: Company, Angel Research
Exhibit 4: Increase in natural rubber prices...
Source: Company, Angel Research, Crisil Research
Exhibit 5: ... led to contraction in EBITDA margins
Source: Company, Angel Research
9.7
24.3
46.5
18.2
(5.0)
(25)
0
25
50
900
1,050
1,200
1,350
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
(%)(Rs cr) Net Sales (LHS) Net Sales Growth (RHS)
120 135
78 72 98 102
118 141
165
0
50
100
150
200
1QF
Y09
2QF
Y09
3QF
Y09
4QF
Y09
1QF
Y10
2QF
Y10
3QF
Y10
4QF
Y10
1QF
Y11
(Rs/kg) Average quarterly rubber prices
16.4 16.4 15.5 14.1 10.4
58.8 60.1 64.7 67.8 68.2
0
25
50
75
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
(%) EBITDA Margin Raw Material Cost/Sales
Apollo Tyres |1QFY2011 Result Update
4July 30, 2010
Net profit at Rs40.6cr, down 57.1%: During 1QFY2011, net profit registered a substantial decline of 57.1% to Rs40.6cr (Rs95cr) primarily on account of lower dispatches due to plant closure and margin contraction. Higher interest cost and depreciation also impacted bottom-line to a certain extent, while capitalisation of the Chennai plant resulted in lower tax rate in 1QFY2011.
Exhibit 6: Net profit down 57% on lower dispatches and margin contraction
Source: Company, Angel Research
8.0 8.4 7.7
8.8
3.6
0
4
8
12
0
50
100
150
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
(%)(Rs cr) Net Profit (LHS) Net Profit Margin (RHS)
Apollo Tyres |1QFY2011 Result Update
5July 30, 2010
Exhibit 7: Quarterly Performance (Consolidated) Y/E March (Rs cr) 1QFY11 1QFY10 % chg FY10 FY09 % chg
Net Sales 1,821 1,635 11.4 8,117 4,995 62.5
Consumption of RM 940 867 8.3 4,149 3,228 28.5
(% of Sales) 51.6 53.0
51.1 64.6
Staff Costs 291.1 192.9 50.9 1,088.3 414.9 162.3
(% of Sales) 16.0 11.8
13.4 8.3
Purchases of TG 83 50 65.5 429 183 134.1
(% of Sales) 4.5 3.1
5.3 3.7
Other Expenses 309 319 (3.3) 1,268 747 69.8
(% of Sales) 17.0 19.5
15.6 14.9
Total Expenditure 1,622 1,429 13.5 6,933 4,573 51.6
Operating Profit 199 206 (3.5) 1,184 422 180.4
OPM (%) 10.9 12.6
14.6 8.5
Interest 33.8 30.7 10.3 134.3 111.8 20.2
Depreciation 63.8 54.4 17.3 254.2 128.5 97.8
Other Income 3 1 134.8 119 31 278.1
PBT (excl. Extr. Items) 104 122 (14.6) 914 213 328.3
Exceptional Items - - - (3.4) (0.6) -
PBT (incl. Extr. Items) 104.3 122.1 (14.6) 917.4 214.0 328.7
(% of Sales) 5.7 7.5
11.3 4.3
Provision for Taxation 30.2 48.5 (37.8) 260.7 74.2 251.2
(% of PBT) 28.9 39.7
28.4 34.7
Reported PAT 74.2 73.7 0.7 656.7 139.7 369.9
PATM (%) 4.1 4.5
8.1 2.8
Equity capital (cr) 50.4 50.4
50.4 50.4
EPS (Rs) 1.5 1.5 0.7 13.0 2.8 369.9
Source: Company, Angel Research
Consolidated Performance: The company however, reported healthy
performance at the consolidated level with both the subsidiaries reporting
good growth and also supported the company’ overall OPM. On a
consolidated basis, the company recorded 11.4% yoy jump in top-line and
marginal 1% increase in net profit at Rs74cr. Consolidated tonnage volume
for the quarter was 93,000MT. Operating margins, at the consolidated level,
stood at 10.9% (12.6%) in 1QFY2011.
Strategic investment in subsidiaries augurs well; arrested margin contraction to
certain extent: During 1QFY2011, Apollo’s subsidiary, Dunlop, registered
top-line of around Rs276cr and OPM of 6%. Top-line growth came solely on
the back of volume growth reflecting the slow recovery in the South African
markets. At the same time, the newly acquired Dutch tyre-maker, Vredestein
Banden, clocked turnover of Rs440cr in 1QFY2011 and registered OPM of
16%. Management is sanguine about clocking good growth for both the
entities.
Apollo Tyres |1QFY2011 Result Update
6July 30, 2010
Conference Call – Key Highlights
Rubber price and price hike action: Management expects natural rubber prices
to remain at current levels of ~ Rs185/kg in 2QFY2011, but expects it to
soften up by 2HFY2011. Rubber imports have increased as the international
rubber prices are ~ Rs30 lower than the domestic prices. The company
imports around 13 -15% of its rubber requirement, which could double in the
current quarter.
In the OEM category, the company hiked prices by 5% each in December
2009, February, April and July 2010. It was easy to pass on the raw material
increases to the OEM customers as they have a significant demand for tyres. In
the replacement segment, the company hiked prices by 5% in January 2010,
3.5% in May 2010, 3.5% in June 2010 and another 3% in July 2010.
Chennai green-field expansion on track: The Chennai green-field capacity is
progressing well and management expects to commission 100tpd in Phase 1
in FY2011, with 200tpd and 400tpd planned to be added in FY2012 and
FY2013, respectively. The expansion entails total investment of Rs2,000cr, out
of which around Rs1,000cr was invested by March 2010.
For FY2011, the company plans to incur overall capex of Rs1,300cr. The
Indian operations will see a major portion of the capex of Rs1,000cr being
incurred at the Chennai facility where it further intends to double existing
capacity for the passenger car tyres. Capex of around Rs120cr will be incurred
at the South African facility, while another Rs80cr will be spent at the European
subsidiary. For FY2012, Apollo plans to incur capex of Rs400cr at its Indian
facilities and maintenance capex across other locations. The company’s net
debt, on a consolidated basis, is Rs1,626cr, up from Rs1,360cr at end of
4QFY2010, which increased mainly to fund capex at the Chennai plant.
Overseas operations: The nation-wide port strike in South Africa resulted in
supply-side constraints, which in turn impacted volume off-take during the
quarter for Dunlop. Apollo has taken a 10% price hike in May in the South
African market. Vredestein continued to report robust volume off-take on
account of an extended winter driving tyre demand during the quarter. Apollo
hiked prices by 4% in May in the European market.
Apollo Tyres |1QFY2011 Result Update
7July 30, 2010
Investment Arguments
Tyre industry set for structural shift: Currently, manufacturing radial tyres is far
more capital intensive than cross-plys. Investment per tonnes per day (tpd) is
3.2x of cross-ply at Rs6.1cr/tpd. On the other hand, the selling price of radial
tyres is around 20% higher than the cross-ply tyres. Taking into account the
difference in capital requirements and consequent impact on asset turnover,
interest cost and depreciation, to generate similar RoCE and RoE, the tyre
companies would need to earn EBITDA margins of around 21% compared to
around 9% being earned on cross-ply tyres. Thus, 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 apparent pricing flexibility, it will result in an
improvement in RoCE and RoE of the tyre manufacturers going forward.
Riding on high domestic demand: The Indian Tyre industry is witnessing strong
demand from both the Replacement as well as the OEM markets, keeping
capacities running at peak. Apollo Tyres is poised to achieve market
leadership through increase in production from 820tpd in FY2010 to
1,100tpd in FY2012E.
Strategic overseas investment offers synergies in long term: The acquisitions
done by Apollo in the last 2-3 years are increasingly contributing to its
Revenues. We estimate Vredestein Banden combined with Dunlop SA to
contribute 30% to overall Consolidated Revenues, helping Apollo 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
The tyre industry, during FY2010, benefited largely from the substantial decline in raw material prices and spike in replacement demand. Going ahead, we are positive on the sector as the OEM off-take is expected to improve on better overall auto industry volume growth. The recent run up in raw material prices is however, a concern and expected to exert pressure on OPMs. We expect the company to clock EPS of Rs7.9 in FY2011E and Rs9.8 in FY2012E.
We believe that strong demand, prevailing high capacity utilisation levels and higher investment requirements, would help the Indian tyre industry to arrest the sharp decline in margins despite the upward move in input costs (rubber and carbon black). Thus, we maintain a Buy on Apollo Tyres, with a Target Price of Rs79, at which level the stock would trade at 8x, 5x and 1.4x FY2012E EPS, EV/EBITDA and P/BV, respectively.
Key downside risk to our call: Sharp rise in input costs, slower growth in international business and lower-than-anticipated growth in tyre off-take pose downside risks to our estimates.
Apollo Tyres |1QFY2011 Result Update
8July 30, 2010
Exhibit 8: Angel v/s consensus forecast
Angel estimates Consensus Variation (%)
FY11E FY12E FY11E FY12E FY11E FY12E
Net Sales (Rs cr) 9,260 10,398 9,014 10,23 2.7 1.6
EPS (Rs) 7.9 9.8 8.8 10.8 (10.6) (9.1)
Source: Angel Research, Bloomberg
Exhibit 9: One-year forward P/E band
Source: Company, Angel Research, Bloomberg
Exhibit 10: One-year forward P/E chart
Source: Company, Angel Research, Bloomberg
Exhibit 11: One-year forward EV/EBITDA band
Source: Company, Angel Research, Bloomberg
Exhibit 12: One-year forward EV/EBITDA chart
Source: Company, Angel Research, Bloomberg
Exhibit 13: Tyre - Recommendation summary
Company Reco. CMP (Rs)
Tgt Price (Rs)
Upside (%)
P/E (x) EV/EBITDA (x) RoE (%) FY10-12E
EPS FY11E FY12E FY11E FY12E FY11E FY12E CAGR (%)
Apollo Tyres* Buy 64 79 23.6 8.1 6.5 5.3 4.4 24.1 16.9 (12.9)
JK Tyre* Buy 164 237 44.6 4.2 3.5 4.2 2.8 9.7 15.9 (3.2)
Ceat Buy 134 164 22.2 5.3 3.3 5.1 3.7 18.7 15.0 (7.7)
Source: Company, Angel Research; Note: * FY2011E and FY2012E EPS on consolidated basis
0
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Apollo Tyres |1QFY2011 Result Update
9July 30, 2010
Profit and Loss Statement (Consolidated) Y/E March (Rs cr) FY07 FY08 FY09 FY10 FY11E FY12E
Gross sales 4,781 5,244 5,463 8,510 9,957 11,180
Less: Excise duty 490 549 468 393 697 783
Net Sales 4,291 4,695 4,995 8,117 9,260 10,398
Total operating income 4,291 4,695 4,995 8,117 9,260 10,398
% chg 64.2 9.4 6.4 62.5 14.1 12.3
Total Expenditure 3,892 4,098 4,573 6,933 8,328 9,297
Net Raw Materials 2,866 2,929 3,411 4,577 5,990 6,671
Other Mfg costs 272 338 337 542 532 598
Personnel 406 440 415 1,088 1,065 1,196
Other 348 390 410 726 741 832
EBITDA 400 597 422 1,184 932 1,101
% chg 78.5 49.5 (29.3) 180.4 (21.2) 18.1
(% of Net Sales) 9.3 12.7 8.5 14.6 10.1 10.6 Depreciation & Amortisation
117.2 129.9 128.5 254.2 327.7 362.3
EBIT 282 467 294 930 605 738
% chg 87.2 65.6 (37.2) 216.5 (34.9) 22.1
(% of Net Sales) 6.6 10.0 5.9 11.5 6.5 7.1
Interest & other Charges 120 89 112 134 169 169
Other Income 34 26 31 119 126 133
(% of PBT) 17.1 6.5 14.7 12.9 22.3 18.9
Recurring PBT 196 405 213 914 562 703
% chg 60.7 106.4 (47.3) 328.3 (38.5) 25.1
Extraordinary Items (0.5) (0.3) (0.6) (3.4) - -
PBT 197 406 214 917 562 703
Tax 79 136 74 261 163 207
(% of PBT) 150.4 71.0 (45.3) 251.2 (37.6) 27.2
PAT 118 270 140 657 399 496
Less: Minority interest (MI) - - - - - -
PAT after MI (reported) 118 270 140 657 399 496
Adj. PAT 117 270 139 653 399 496
% chg 31.6 130.4 (48.4) 369.5 (38.9) 24.2
(% of Net Sales) 2.7 5.7 2.8 8.0 4.3 4.8
Basic EPS (Rs) 2.5 5.5 2.8 13.0 7.9 9.8
Fully Diluted EPS (Rs) 2.5 5.5 2.8 13.0 7.9 9.8
% chg 38.5 118.9 (50.0) 369.5 (38.9) 24.2
Apollo Tyres |1QFY2011 Result Update
10July 30, 2010
Balance Sheet (Consolidated) Y/E March (Rs cr) FY07 FY08 FY09 FY10 FY11E FY12E
SOURCES OF FUNDS
Equity Share Capital 46 49 50 50 50 50
Preference Capital - - - - - -
Reserves & Surplus 877 1,129 1,299 1,917 2,366 2,815
Shareholders’ Funds 923 1,178 1,350 1,968 2,417 2,865
Total Loans 823 646 891 1,707 2,107 2,107
Deferred Tax Liability 170 176 194 251 229 203
Total Liabilities 1,916 2,000 2,435 3,926 4,752 5,176
APPLICATION OF FUNDS
Gross Block 1,947 1,955 2,284 5,563 7,123 7,877
Less: Acc. Depreciation 681 750 882 3,120 3,448 3,810
Net Block 1,266 1,205 1,402 2,443 3,675 4,067
Capital Work-in-Progress 80 95 281 536 356 315
Goodwill 26 22 24 118 118 118
Investments 5 5 5 6 6 6
Current Assets 1,647 1,484 1,423 2,439 2,242 2,514
Cash 194 285 362 349 422 503
Loans & Advances 447 171 206 310 400 416
Other 1,006 1,028 855 1,780 1,421 1,595
Current liabilities 1,108 811 700 1,614 1,645 1,843
Net Current Assets 539 673 723 824 597 671
Mis. Exp. not written off - - - - - -
Total Assets 1,916 2,000 2,435 3,926 4,752 5,176
Apollo Tyres |1QFY2011 Result Update
11July 30, 2010
Cash Flow Statement (Consolidated) Y/E March (Rs cr) FY07 FY08 FY09 FY10 FY11E FY12E
Profit before tax 197 406 214 917 562 703
Depreciation 117 130 129 254 328 362
Change in Working Capital (28) 104 (67) 97 (432) 5
Less: Other income (288) 190 (306) (421) (1045) (129)
Direct taxes paid 79 136 74 261 163 207
Cash Flow from Operations 495 313 508 1428 1340 992
(Inc.)/Dec. in Fixed Assets (665) (18) (517) (3533) (1381) (713)
(Inc.)/Dec. in Investments (5) 0 0 (1) 0 0
(Inc.)/Dec. in loans and adv. (38) 18 (28) (111) (90) 16
Other income 34 26 31 119 126 133
Cash Flow from Investing (674) 27 (513) (3527) (1345) (564)
Issue of Equity 244 72 46 0 0 0
Inc./(Dec.) in loans 73 (177) 245 816 400 0
Dividend Paid (Incl. Tax) 24 29 27 44 29 47
Others (200) (173) (234) 1225 (352) (394)
Cash Flow from Financing 141 (249) 83 2086 78 (347)
Inc./(Dec.) in Cash (38) 91 77 (13) 73 81
Opening Cash balance 231 194 285 362 349 422
Closing Cash balance 194 285 362 349 422 503
Apollo Tyres |1QFY2011 Result Update
12July 30, 2010
Key Ratios Y/E March FY07 FY08 FY09 FY10 FY11E FY12E
Valuation Ratio (x)
P/E (on FDEPS) 25.3 11.6 23.1 4.9 8.1 6.5
P/CEPS 12.7 7.8 12.0 3.5 4.4 3.8
P/BV 3.2 2.7 2.4 1.6 1.3 1.1
Dividend yield (%) 0.7 0.8 0.7 1.2 0.8 1.3
EV/Sales 0.8 0.7 0.7 0.6 0.5 0.5
EV/EBITDA 9.0 5.8 8.9 3.9 5.3 4.4
EV / Total Assets 1.9 1.7 1.5 1.2 1.0 0.9
Per Share Data (Rs)
EPS (Basic) 2.5 5.5 2.8 13.0 7.9 9.8
EPS (fully diluted) 2.5 5.5 2.8 13.0 7.9 9.8
Cash EPS 5.0 8.2 5.3 18.1 14.4 17.0
DPS 0.4 0.5 0.4 0.7 0.5 0.8
Book Value 19.9 24.1 26.8 39.0 47.9 56.8
DuPont Analysis
EBIT margin 6.6 10.0 5.9 11.5 6.5 7.1
Tax retention ratio 0.6 0.7 0.7 0.7 0.7 0.7
Asset turnover (x) 2.9 2.7 2.6 2.9 2.3 2.3
RoIC (Post-tax) 11.3 18.1 10.1 23.6 10.9 11.6
Cost of Debt (Post Tax) 9.1 8.0 9.5 7.4 6.3 5.6
Leverage (x) 0.7 0.5 0.3 0.6 0.7 0.6
Operating RoE 13.0 22.8 10.3 32.7 14.0 15.3
Returns (%)
RoCE (Pre-tax) 16.6 23.9 13.2 29.2 13.9 14.9
Angel RoIC (Pre-tax) 15.8 14.0 26.0 14.2 27.3 16.4
RoE 12.7 18.4 16.2 24.0 24.1 16.9
Turnover ratios (x)
Asset Turnover (Gross Block) 2.6 2.4 2.4 2.1 1.5 1.4
Inventory / Sales (days) 45 53 49 36 33 33
Receivables (days) 23 26 20 23 23 23
Payables (days) 51 58 47 43 53 50
WC cycle (ex-cash) (days) 29 28 27 19 13 6
Solvency ratios (x)
Net debt to equity 0.7 0.3 0.4 0.7 0.7 0.6
Net debt to EBITDA 1.6 0.6 1.2 1.1 1.8 1.5
Interest Coverage (EBIT/Interest) 2.4 5.3 2.6 6.9 3.6 4.4
Apollo Tyres |1QFY2011 Result Update
13July 30, 2010
Disclosure of Interest Statement Apollo Tyres 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 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 Rs 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%)
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