Apollo Tyres Gains 9%, Hits Fresh 52-Week High As Co. Surprises On Sequential Revenue Growth In Q1Fy23

Shares of Apollo Tyres in trade on August 16, 2022 hit a fresh 52-week high of Rs. 257.55, logging gains to the tune of over 9%. The tyre company's scrip last closed at a price of Rs. 236.1 apiece on the NSE.

In Q1FY23, the small cap tyre manufacturer reported a healthy performance Total operating income on consolidated basis stood at Rs. 5,942 crores, up6.5% QoQ. EBITDA for the quarter stood at Rs. 690 crore with EBITDA margins at 11.6%, up around 40 bps QoQ. Consequently consolidated PAT for Q1FY23 came in at Rs. 191 crores, up 68% QoQ. Higher PAT was tracking higher than
anticipated margins & lower effective tax rate.

As per brokerage firm-ICICI Direct, "the company's performance in terms of sequential revenue growth as well as margin improvement came in as a positive surprise. Gross margin was stable QoQ whereas employee cost was down 58 bps QoQ leading to healthy margins. EBITDA margins on standalone basis stood at9.7% (up 30 bps QoQ) supported by operating leverage gains amidst gross margin decline of around 96 bps QoQ".

"We hold a positive view on the company primarily tracking calibrated capex spends amidst focus on balance sheet health and capital efficiency".

Apollo Tyres is engaged in manufacturing and sale of automotive tyres. The Company's segments include India, Europe and Others.