Wednesday, October 21, 2009

[Investors Please Listen] Apollo Tyres Q2FY10 Result Update ; Positive surprises to continue, Not rated

Apollo Tyres Ltd

 

Positive surprises to continue, Not rated


NOT RATED

 

CMP: Rs 55                           Target Price: NA


Apollo (APL) 2QFY10 results were significantly ahead of our expectations at standalone as well as consolidated level. APL reported a standalone profit of Rs 1 bn against our expectation of Rs 776 mn driven by strong volume growth and operational performance. EBIDTA margins stood at 16.4% (flat QoQ) despite a higher QoQ raw material cost. At consolidated level, APL reported a profit of Rs 1.3 bn (against our expectation of Rs 776 mn).

Going forward, we have factored in pressure on EBIDTA margins in 2HFY10 due to rising raw material cost. We expect standalone EBIDTA margins at 13.5% and 12.5% in 3QFY10 and 4QFY10 respectively. Our sensitivity analysis indicates 7% change in EPS for every 1% change in realizations.

We are upgrading our standalone FY10 EPS estimates by 21% to Rs 7 per share. We were expecting subsidiaries to break even in FY10 and contribute to earnings in FY11. However, post the strong 2QFY10 subsidiary performance, we expect subsdiaries to contribute Rs 0.5 to FY10 EPS (net profit of Rs 250 mn).  At Rs 55, the stock trades at attractive valuations of PER of 7.8x and 7.3x our FY10 standalone and consolidated earning estimates respectively. We maintain our positive view on the stock. Currently, we do not have rating on the stock.


--~--~---------~--~----~------------~-------~--~----~
Safe Harbor:
The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.

You received this message because you are subscribed to the Google Groups "Investors Please Listen !" group.
To post to this group, send email to investorspleaselisten@googlegroups.com
To unsubscribe from this group, send email to
investorspleaselisten+unsubscribe@googlegroups.com For more options, visit this group at http://groups.google.com/group/investorspleaselisten?hl=en
-~----------~----~----~----~------~----~------~--~---

No comments:

Blog Archive

Promote Your Blog

Life Insurance | Health Insurance | Auto Insurance


Investors Please Listen !

 
More than 100 kinds of Insurance products from more than
20 companies under one roof.



Call: 9818269396 
investorspleaselisten@in.com
www.investorspleaselisten.blogspot.com

 

 

Safe Harbor:

The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
Powered by Olark
Advertising Learn to Invest