Brokerages raise target on Apollo Tyres despite fall in PAT YoY; details

Apollo Tyres reported its second quarter (Q2FY26) results on Friday, during market hours. Post Q2, brokerages increased their target price on Apollo Tyres on the back of strong outlook and fair valuations.   At 9:19 AM, Apollo Tyres share price was trading 3.56 per cent higher at ₹537.4 per share. In comparison, BSE Sensex was up 0.11 per cent at 84,655.72.

Apollo Tyres Q2 results: Key highlights

In Q2, Apollo Tyres consolidated net profit fell 13 per cent at ₹258.04 crore, as compared to ₹297.4 crore a year ago. The net profit fell despite a better operational performance due to an exceptional expense of ₹180 crore in the quarter, substantially higher than the ₹5.17 crore a year ago.

 

Its revenue from operations, however, grew 6 per cent year-on-year (Y-o-Y) and stood at ₹6831.08 crore, as compared to ₹6437.02 crore.

 

Its Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at ₹1,020.7 crore, up 16 per cent Y-o-Y, as compared to ₹877.9 crore .   CATCH STOCK MARKET LIVE UPDATES TODAY

Brokerage view on Apollo Tyres 

Nomura has maintained a ‘Neutral’ call on Apollo Tyres shares and has raised the target to ₹538 from ₹490 per share. “ We believe the current valuation at 6.3x FY28F EV/Ebitda is in the

fair value zone,” noted Nomura.

 

According to Nomura, commercial vehicle (CV) replacement demand recovery (55 per cent of the company’s standalone revenue) remains slow. The brokerage has maintained 6 per cent India volume growth over FY27-28F, driving 6 per cent revenue compound annual growth rate (CAGR) over FY25-28F. However, given commodity tailwinds, partly offset by higher ad spends (lead

sponsor of the Indian cricket team from Sep-2025 to Mar-2028 for ₹5,800 crore), Nomura raised margins by 80/30/20 basis points (bps) to 14.4 per cent/14.6 per cent/14.6 per cent for FY26/27/28F.

 

Similarly, Emkay Global Financial also continued with ‘Buy’ and hiked the target to ₹600 per share from ₹525. 

 

“We raise FY26E/27E/28E earnings per share (EPS) by 6 per cent each, led by improving profitability, operating efficiencies, and phased flow-through of European restructuring benefits,” noted the brokerage.

 

Meanwhile, Nuvama Institutional Equities also reiterated ‘Buy’ and increased the target to ₹600 per share from ₹520.

 

The brokerage reckons a revenue CAGR of 8 per cent over FY25–28E led by replacement growth in APMEA/Europe; Ebitda CAGR shall be higher at 15 per cent. Led by healthy cash flows, net debt/Ebitda would fall from 1.5x in FY25 to 0.3x in FY28E.