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1. 6
Group 6
Amya Jain
Anoushka Sharma
Anoushka Yadav
Anushika
Apurva Choudhari
Aradhya Khandelwal
Santhosh
Shashwat Shiromani
Apollo Tyres
IPM02008
PGP14031
IPM02224
PGP14033
PGP14034
PGP14035
IPM02130
PGP14210

2. Apollo Tyres - Company Overview
REVENUE STREAMS
Original Equipment
Manufacturers
International
markets
After-sales services and
support
High-Quality Products
leading to durable and
reliable tyres
Innovation through advanced
tyre technologies and designs
Strong after-sales service and
support
Sustainable manufacturing
processes
Raw Material Suppliers: Suppliers
of natural and synthetic rubber,
carbon black, and other essential
materials.
KEY PARTNERS
OEMs (Original Equipment
Manufacturers): Partnerships
with automobile manufacturers
Network of national and
international distributors and
retail partners.
Collaborations with R&D centers
in Europe and Asia.
Strategic Partnerships for e.g.
Manchester United for brand
promotion, TATA Power for EV
charging stations.
APOLLO TYRES
37.6%
MRF TYRES
25.8%
BRIDGESTONE
18.3%
JK TYRE
9.7%
CEAT
8.6%
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Established in 1972 Headquarters: Gurgaon, Haryana
VALUE
PROPOSITIONS
We aim to lead in quality, innovation, and
customer satisfaction. Our goal is to offer a
wide range of tire products for various
vehicle segments globally.
Apollo Tyres aims to continually enhance
stakeholder value by adhering to best
practices and making a positive impact on
the community and environment through
sustainable practices.
Company Vision
Company Mission
-----
Competitors
Apollo Tyres Ltd is a prominent Indian multinational tire manufacturing company with
a strong presence in over 100 countries. Apollo Tyres specializes in producing a wide
range of tires for passenger cars, commercial vehicles, motorcycles, and off-road
vehicles, catering to various segments and markets. The company operates multiple
manufacturing units across India, the Netherlands, and Hungary.

3. EIC ANALYSIS
Economic Industry
Company
The slowdown in the Euro Area, poses a
risk for Apollo Tyres' export markets,
decreasing automotive demand in this
region.
Strong economic growth in India and
China, with India’s GDP growth revised
upward, indicates a robust demand for
automobiles and tyres
The surge in global inflation, particularly
in raw materials like petrochemicals
and rubber, could significantly elevate
production costs.
Global tightening of monetary policies
may increase borrowing costs,
impacting capital investments and
expansion efforts.
India’s double-digit increase in vehicle
sales, especially in SUVs and premium
two-wheelers, signifies a growing
domestic market
Technological Innovations: Advances
like intelligent and eco-friendly tyres are
transforming the industry.
Emerging Market Growth: Significant
growth in tyre demand in Asia due to
lower production costs and rising
automotive sales.
EV Market Expansion: Rapid growth in
EVs requires specialized tyres,
presenting new market opportunities.
Environmental Regulations: Stringent
global regulations drive continuous R&D
investment in sustainable practices.
Raw Material Volatility: Price fluctuations
in essential raw materials impact
production costs, requiring effective
cost management.
Focus on growing presence in
developing nations to reduce reliance
on the Indian market and diversify
income sources.
Heavy investment in R&D to develop
advanced tires with features like
increased longevity, better grip, and
improved fuel efficiency.
Strengthening Apollo brands through
customer-centric initiatives and
effective marketing campaigns.
Enhancing productivity and reducing
costs by optimizing the supply chain
and adopting lean manufacturing and
advanced technology.
Emphasizing eco-friendly practices,
including the use of sustainable
materials, energy efficiency, and
minimizing environmental impact.
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

4. APOLLO TYRES CENTRE
OF EXCELLENCE LIMITED
APOLLO TYRES
LIMITED
INDIAN
SUBSIDIARIES
INDIAN
ASSOCIATE
TRUSTED MOBILITY
SERVICES LIMITED
FOREIGN
SUBSIDIARIES
KT TELEMATIC
SOLUTIONS
PRIVATE LIMITED
APOLLO TYRES CENTRE
OF EXCELLENCE LIMITED
TRUSTED MOBILITY
SERVICES LIMITED

5. Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
DASHBOARD (1/2)
Dashboard

6. Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
DASHBOARD (2/2)
Fundamental Analysis

7. Apollo Tyres' current ratio improved from 0.93x
in 2020 to 1.13x in 2023 but fell to 0.95x in 2024,
lagging behind the industry average. Actions
included reducing production, optimizing
inventory, and managing receivables to
address liquidity challenges amidst rising
costs and increased competition.
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Liquidity Ratios
Fundamental Analysis
CURRENT RATIO
Apollo Tyres' quick ratio fluctuated, improving
to 0.77x in 2021 but dropping to 0.54x in 2024.
Actions included efficient cash management
and receivables collection. Despite
improvements, liquidity challenges persisted
due to increased costs and competition.
QUICK RATIO

8. From 2020 to 2024, Apollo Tyres maintained
receivables management well above the
industry average. This consistent efficiency
suggests strong customer relationships and
effective credit policies, even amid
challenging conditions.
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Efficiency Ratios
Fundamental Analysis
DEBTORS TURNOVER
Apollo Tyres' inventory turnover has been
consistently below the industry average from
2020 to 2024, reflecting slower inventory
movement. Factors include production
inefficiencies, cost management challenges,
and potentially slower market demand or
increased competition.
INVENTORY TURNOVER

9. Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Apollo Tyres' interest cover ratio improved
from 1.91x in 2020 to 5.52x in 2023 but fell to
2.73x in 2024. Despite matching the industry
average in 2021 and 2023, the 2024 decline
reflects increased financial pressures, leading
to cost management and debt optimization
efforts.
Solvency Ratios
Fundamental Analysis
INTEREST COVERAGE RATIO
Apollo Tyres’ leverage ratio increased from
2020 to 2024, rising from slightly below to
significantly above the industry average. The
trend indicates a strategic shift towards more
aggressive debt use for growth and capital
projects, with notable increases in 2022 and
2024.
TOTAL DEBT/EQUITY

10. Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Profitability Ratios
Fundamental Analysis
Apollo Tyres' GPM fluctuated, initially
lagging behind the industry but later
surpassing it with strategic
improvements. Actions like better cost
management, local sourcing, and digital
transformation led to strong
performance in 2021 and 2023. In 2024,
GPM aligned with the industry average
amid ongoing cost pressures.
GROSS PROFIT MARGIN (%)

11. Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Apollo Tyres' ROA improved from a low in 2020
to 5.76% in 2023, reflecting better asset
utilization and recovery efforts. However, it
declined to 2.59% in 2024, indicating continued
challenges in maintaining high asset returns
amid rising costs and financial pressures.
Profitability Ratios
Fundamental Analysis
RETURN ON ASSET(%)
Apollo Tyres' ROE improved from 2.74% in 2020
to 11.05% in 2023, aligning closely with the
industry average. Actions like cost reduction,
lean manufacturing, and digital investment
enhanced profitability. However, ROE fell to
5.42% in 2024 due to ongoing financial
pressures, despite cost-cutting efforts.
RETURN ON EQUITY (%)

12. Calculations
WACC
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

13. FCFE Valuation- Model 1 - DDM Model
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
The company is paid out dividend of INR 6.00.
Under the assumption that the company will keep paying constant dividend of INR 6.00. The growth
rate has been found by formula b X r where b is the retention rate and r is the return on equity.
Here the growth rate has come out to be 7.4%.
Formulae:
Growth rate = Retention rate(b) x Return on Equity(r)
Retention rate = 1 - dividend payout ratio
Dividend payout ratio = DPS/EPS

14. Valuation- Model 2- DCF 1 stage
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

15. Valuation- Model 2- DCF 2 stage
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations
Here the intrinsic value per share
is INR. 321.85 and the market
price is INR. 556.
HENCE THE STOCK IS
OVERVALUED. In this scenario we
would recommend to sell.
Here the Net income is said to
increase by the current growth
rate of 12% which is greater than
the current growth rate of Indian
Economy, hence post March 30
the growth rate is assumed to be
5% till perpetuity.

16. Valuation- Negative FCFE
In 2024 and 2021 the FCFE is negative other than that the FCFE is positive with median FCFE as INR 493.70.
In Year 2024 FCFE is negative possibly because of negative net debt issued i.e. the company is
repaying more debt than they are issuing debt.
In Year 2021 FCFE is negative possibly because of high Capex.
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

17. Valuation- Model 3- DCF Mkt Growth Rate
Here the intrinsic value per share is
INR. 291.70 and the market price is
INR. 556. HENCE THE STOCK IS
OVERVALUED. In this scenario we
would recommend to sell.
Here the Net income is said to
increase by industry/market the
growth rate of 8.6% which is greater
than the current growth rate of
Indian Economy, hence post March
30 the growth rate is assumed to be
5% till perpetuity.
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

18. Valuation- Model 4- Relative Valuation
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

19. Football Field
Fundamental AnalysisEIC AnalysisAbout Valuation Recommendations

20. Recommendation
Fundamental AnalysisEIC AnalysisAbout FCFE Valuation Recommendations

21. Fundamental AnalysisEIC AnalysisAbout FCFE Valuation Recommendations
Recommendation

22. Thank You
Group 6