Stock Analysis - Apollo Tyres.

>> Saturday, May 23, 2009

Scrip - Apollo Tyres Ltd.
CMP - Rs 29.55
BSE Code - 500877
Market Cap - 1489.32 Crores.

Apollo Tyres Ltd. (ATD) is engaged in the global tire industry. It launched Regal brand of radials for truck and bus commercial vehicles. Its products include truck/bus radial, Off-The-Road (OTR) tires, retreading and allied automotive services. It EnduRace, a truck-bus radial is undergoing road tests. Its light truck product range includes LT3+ and SP Endura. ATD’s retreaded tire, Apollo DuraTyre was launched in May 2007. As of March 31, 2008, the Company had launched its two retail stores: National Tyres in Patiala, Punjab and Lal Tyre Centre, Chennai, Tamil Nadu.

Snap Shot of the Key Business :
The company is engaged in production of tyres from rubber.
It is from Tyre and Tubes Industry. Its key competitors are JK Tyres, MRF , Etc.

Key Financial :
Net Profit if compared to March 08 and March 09.
Sept 2008 - 918.87 Cr.
March 2009 - 1110.56 Cr.

The financial are looking strong as Turn over and net profit is always increasing.

Key Risks:
The rubber has been volatile since past 4-5 months. There has been a 20% increase in the price of rubber. This has lead to increase in the rice of Raw Material as the inventory stored is of maximum of 7 days or so.
Rubber is the basic component in the manufacture of tyres so increase in the price of rubber = less of profits.

Vredestein Banden:
Recently the company acquired a Dutch Company Vredestein Banden , which can result in the company to increase its profits and way to global expansion.The deal is expected to be for a consideration of around $300 million.
Vredestein is a premium tier I tyre manufacturer with a portfolio of high-end, high speed rated passenger car tyres going up to a speed of 300 kilometers per hour.

Best price to buy Apollo Tyres:
Due to current stock market political rise the stock rose fro 14 levels to 28 levels. So technically speaking the support of the stock 22 is the best price to buy this stock.