Apollo Tyres: Valuations reflect positives, margin expansion a key trigger

The stock is trading at 16 times its estimated FY25 consolidated earnings per share

After hitting its 52-week high last week, the stock of Apollo Tyres is down about 6 per cent. Prior to the correction, the stock had witnessed a rerating and upgrades, rising 23 per cent since the start of the current financial year (FY24).

The gains came on expectations of rising margins -- led by lower raw material costs, pricing discipline (focus on profitability over market share), moderate capex intensity and better product mix. In addition to this, the company, in a recent analyst meet, has reiterated its medium term goals of improving its revenues, return ratios, margins and capping its