Pick of the Week: Apollo Tyres

FOR SHORT TERM / MEDIUM TERM

Buy : APOLLO TYRES

Equity : 50.40 Cr, BSE Code : 500877, CMP : 37.45

Apollo Tyres. is the flagship company of the Raunaq Group. Mathew T Marattukalam, Jacob Thomas and his associates incorporated it in 1972. In 1974, the company was taken over by Dr Raunaq Singh. The tyre project was implemented in 1976 and commercial production was started in the year 1977.� The company is the second largest player in the commercial vehicle (CV) segment of tyre industry, and has presence mainly in the domestic market. The main activities are manufacturing and supply of automobiles tyres, tubes and flaps. It has a major presence in the truck and bus (T&B) tyre segment and commands market share of 29% It derives about 70% of its revenues from the replacement market. It also has a presence in the tractor and passenger car radial segment as well.

Apollo Tyres principal activities are to manufacture and sell automobiles tyres, tubes and flaps. The group exports its products to South America, Pakistan, South-East Asia, Middle East Countries and Africa. The manufacturing plants of the group are located in Trichur, Vadodara and Pune. The manufacturing facilities at Durban, Ladysmith and Zimbabwe have helped Apollo Tyres in consolidating its position in the highly competitive tyre market. With 5 sales, services & branch offices, 9 regional offices and 3 distribution centers at Ladysmith, Durban and Jetpark (Johannesburg) the company is all set to meet the demand of a plethora of its international clients.

Apollo Tyres continued leadership in the dominant industry segment of truck and bus tyres has provided the company with the cutting edge over its competitors and proved it global presence with acquisition of Dunlop Tyres International Ltd. in South Africa. The company ability to come out with the product innovations and technical superiority has enabled it to provide world class quality in tyres and tubes with the dynamic and progressive leadership. The continuous thrust in road infrastructure and construction of expressways and national highways and creation of road infrastructure has given and will increasingly give a tremendous fillip to surface transportation in the coming years. Sales and NP for year ended 07 - 08 were 3697.9Cr & 219.6Cr. Sales and NP for latest Quarter 1075.9Cr & 48.6Cr. On YOY basis NP has increased by 93% & On Latest Quarter� NP has increased by 4% Dividend during year ended 07-08 was 50%