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  • Apollo Tires Valuation: Abhishek Fogla Punit Daftry

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    This document provides an overview and valuation of Apollo Tires, India's second largest tire manufacturer. Key points include: - Apollo Tires share price as of August 1, 2013 was Rs 65.20 - Macro factors like declining rubber prices and slowing auto industry impact the tire industry - Valuation indicators like beta, growth rates, treasury bill rates are presented - Financial details like net income, capex, FCFE are provided for 2012 - A DCF model is used to value the company's equity at Rs 180.51 per share, indicating the current share price of Rs 65.20 is undervalued.

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    Apollo Tyres Valuation

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    This document provides an overview and valuation of Apollo Tires, India's second largest tire manufacturer. Key points include: - Apollo Tires share price as of August 1, 2013 was Rs 65.20 - Macro factors like declining rubber prices and slowing auto industry impact the tire industry - Valuation indicators like beta, growth rates, treasury bill rates are presented - Financial details like net income, capex, FCFE are provided for 2012 - A DCF model is used to value the company's equity at Rs 180.51 per share, indicating the current share price of Rs 65.20 is undervalued.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    18 views7 pages

    Apollo Tires Valuation: Abhishek Fogla Punit Daftry

    Uploaded by

    foglaabhishek
    This document provides an overview and valuation of Apollo Tires, India's second largest tire manufacturer. Key points include: - Apollo Tires share price as of August 1, 2013 was Rs 65.20 - Macro factors like declining rubber prices and slowing auto industry impact the tire industry - Valuation indicators like beta, growth rates, treasury bill rates are presented - Financial details like net income, capex, FCFE are provided for 2012 - A DCF model is used to value the company's equity at Rs 180.51 per share, indicating the current share price of Rs 65.20 is undervalued.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    of 7

    APOLLO TIRES VALUATION

    ABHISHEK FOGLA

    PUNIT DAFTRY

    Company Overview

    Indias 2nd largest tire manufacturer.


    Apollo Tires (NSE) 1st Aug, 2013 Share Price Rs 65.20. Tire Industry Sales

    OEM declining growth Replacement stable growth rate

    Macro Economic Analysis


    After having reached a peak of Rs. 240 per kg in April 2011, rubber prices have fallen to around Rs. 162 per kg during March 2013.
    300 250 200

    150
    100 50

    0 Jul-08 Jul-09
    Jul-10 Jul-11

    Apr-09

    Apr-10

    Apr-11

    Apr-12

    Jul-12

    Oct-08

    Jan-09

    Oct-09

    Jan-10

    Oct-10

    Jan-11

    Oct-11

    Jan-12

    Oct-12

    Series1

    Demand slowdown in the domestic auto industry has had an adverse impact on the domestic tire industry. Passenger light commercial vehicle - 6.56% , Heavy segment - 1.41% Commercial vehicle segment - 5.28%. Passenger vehicle segment - 8.56%. Two wheeler segment -1.04%. Three wheeler 1.47%.

    Jan-13

    Apr-13

    Valuation Indicators

    Treasury Bill Rate - 6.48% - Average of past 60 months T-bill rate. Market Rate - 8.32% - Average of past 60 months return of NIFTY AUTO industry.

    Beta 0.93 Taken from CMIE Prowess data of company.


    Growth Rate 1st Stage 14.95% from CAGR of previous year EBITDA. For 4 yrs. (Declining Stage). Growth Rate 2nd Stage 9. 75% as growth prediction of tire industry on various research reports. For 3 yrs. (Declining Stage). Stable Industry Growth Rate 4%. GDP INDIA 5%

    Valuation Data

    Net Income 1,813.30 (Rs Million) Non Cash Charges 1,808.50 (Rs Million) Capital Expenditure - 2820 (Rs Million) Change in Working Capital 267 (Rs Million) Net Borrowing 934 (Rs Million) FCFE (2012) 1468.80 (Rs Million)

    COE 8.19%.
    No of Outstanding Shares 504.09 (Million)

    FCFE
    2012 2013E Growth FCFE Terminal Value Present Value Value of Equity No of shares Value per Share 90992.29 504.09 1468.80 14.95% 1688.39 2014E 13.65% 1918.85 2015E 12.35% 2155.83 2016E 11.05% 2394.05 2017E 9.75% 2627.47 2018E 7.85% 2833.72 2019E 5.95% 3002.33 74499.49 1560.56 1918.85 2155.83 2394.05 2627.47 2833.72 77501.82 2020E 4.00% 3122.42

    180.51

    Share Price is Under Valued. Currently Share is trading at Rs 65.20 per share. As per our Valuation it comes to Rs 180.51 per share

    Thank You

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