Views on Apollo Tyres Ltd (ATL) 2QFY2016 Results: Angel Broking

Views of Mr. Bharat Gianani (Sr. Research Analyst - Automobile, Angel Broking) on Apollo Tyres Ltd (ATL) 2QFY2016 Results:

"Apollo Tyres Ltd (ATL) 2QFY2016 results were below our estimates due to subdued topline and a miss on the margin front. ATL revenues continued to remain under pressure declining 10% YoY to INR 2,996 cr (slightly missing our estimate of INR 3,105 cr). Subdued demand coupled with increased Chinese imports continues to impact the domestic operations (domestic revenues were flat). Further, lackluster demand in the European market, price cuts and depreciation in the Euro vis a vis INR impacted the European revenues (revenues dipped 20%). EBIDTA margins at 16.1% improved 120 bp yoy owing to soft raw material prices but missed our estimates of 17.3%. The margins dipped 160 bp sequentially despite higher revenues leading to disappointment. Also the higher depreciation (at INR 107 cr v/s expectation for INR 94 cr) further impacted profitability. Given the operating miss and higher depreciation charge, the Adjusted Net profit at INR 231 cr was significantly below our estimates of INR 305 cr. During the quarter, ATL realized exceptional gain of INR 48 cr on account of sale of property. We currently have NEUTRAL rating on the stock."

Shares of APOLLO TYRES LTD. was last trading in BSE at Rs.171.05 as compared to the previous close of Rs. 182.4. The total number of shares traded during the day was 545550 in over 6144 trades.

The stock hit an intraday high of Rs. 182.1 and intraday low of 168.4. The net turnover during the day was Rs. 94845083.

Source : Equity Bulls

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