Apollo Tyres falls after muted Q3 revenue

Shares of Apollo Tyres Limited traded over a percent lower at Rs 545 in the early trade on February 8 after the company reported a marginal increase in revenue in the December quarter.

The company’s revenue increased 2.7 percent to Rs 6,595.4 crore from the year-ago period. Its profit, however, climbed 78 percent to Rs 496.6 crore.

At 9.30 am, the stock was trading at Rs 548, down 0.7 percent from the previous close. In the last three months, the stock has surged nearly 44 percent.

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The company’s December earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 32.2 percent to Rs 1,208.1 crore compared to Rs 913.4 crore in the same period of the previous fiscal year.

Also read: Options Trade | Earnings-based non-directional options strategy setup in Apollo Tyres

The EBITDA margin stood at 18.3 percent, up from 14.2 percent last year.

Global brokerage firm Morgan Stanley has an “equal weight” call on the counter with a target price of Rs 433. This implies a downside potential of over 21 percent from the previous close of Rs 552. Analysts at the firm suggest that the revenue was lower than the estimates.

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