Goldman Sachs downgrades Apollo Tyres ahead of earnings

Goldman Sachs downgrades Apollo Tyres Ltd to "neutral" from "buy", also removing it from its Asia Pacific buy list citing limited upside to its new target price of  Rs 103 .

The investment bank adds that, structurally, it still believes the Indian tyre industry faces high earnings volatility across the cycle, with 12-18%  sustainable return-on-equity for Apollo Tyres versus 20% expected in FY14E.

In the near term, it adds that softness in natural rubber prices may act as a strong tailwind to the company's earnings as well.

Apollo Tyres will report March-quarter results on Friday.