Apollo Tyres Q2 Results Review - Strong Demand, Margin Expansion Ahead: Reliance Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Reliance Securities Report.Apollo Tyres Ltd. recorded a strong operating performance in Q2 FY23 with Ebitda margin coming at 12% (down 61 basis points YoY and up 35 basis points QoQ), versus our estimate of 11.6% due to regular price hike, tight cost control and better operating leverage. Consolidated revenue increased by 17% YoY (flat QoQ) to Rs 59.6 billion, broadly in line with our estimate of Rs 60 billion, due to strong performance of Europe business coupled with healthy India operations. Apollo Tyres' standalone revenue grew by 17% YoY (down 4% QoQ) to Rs 42.5 billion. Consolidated Ebitda stood at Rs 7.1 billion (up 12% YoY and up 3% QoQ), 2% above our estimate of Rs 6.9 billion due to operating leverage despite higher commodity cost. Raw material/sales grew by 257 bps YoY and 81 bps QoQ to 61.1%. Adjusted profit after tax stood at Rs 1.94 billion (up 10% YoY and up 2% QoQ), 1.3% below our estimate of Rs 1.97 billion, due to higher interest expenses on higher debt level. Operating leverage, regular price hikes, falling commodity cost and geographical mix would aid margins..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Apollo Tyres Q2 Results Review - Strong Demand, Margin Expansion Ahead: Reliance Securities

Operating leverage, regular price hikes, falling commodity cost and geographical mix would aid margins.

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