Apollo Tyres, 8th February, 2013

7/29/2019 Apollo Tyres, 8th February, 2013

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Please refer to important disclosures at the end of this report 1

EBITDA 382 333 14.9 367 4.2

EBITDA Margin (%) 11.9 10.3 158bp 10.9 101bp

Source: Company, Angel Research

Apollo Tyres (APTY) results for 3QFY2013were subdued as the consolidated top-line performance across the threegeographies remained weak mainly on account of sluggish demand amid weakeconomic environment. The consolidated top-line stood flat (down 4.7% yoy) at

`3,217cr, lower than our estimate of `3,559cr on account of a 2.7% and 0.5%yoy decline in revenues in India and Europe respectively. Nonetheless, theconsolidated EBITDA margin expanded ~100bp sequentially (~160bp yoy) to11.9%, led by receding raw-material cost pressures. However, higheradvertisement expenses towards brand building restricted further marginexpansion. The EBITDA margins in India, Europe and South Africa expanded by200bp, 160bp and 200bp to 10.1%, 4.8% and 20.1% respectively. Further,higher other income (on forex gains and insurance proceeds) and lower tax rateresulted in a 40.7% yoy (17.8% qoq) growth in the adjusted net profit to `180cr.

APTYs standalone results wereimpacted by a significant decline in the OEM demand for medium and heavycommercial vehicle (MHCV) tyres (volume down ~40% yoy) which led to a 2.7%

yoy (10.8% qoq) decline in the top-line. The EBITDA margin too remained underpressure on a sequential basis as it expanded by a modest ~20bp (strong 200bpyoy) to 10.1%, despite the decline in raw-material expenses. However, led byhigher other income, sequential decline in the bottom-line was restricted to 1.8%.

We lower our volume estimates for FY2013/14 to accountfor the subdued demand scenario in the key geographies of India and Europe.Nonetheless, our earnings estimates for FY2013 are revised upwards as we factorin the higher other income during the quarter. We remain positive on the tyreindustry in view of the structural shift that the industry is witnessing and also dueto the softening of natural rubber prices. However, we remain watchful of thecapital expenditure plans of the company in the absence of proper clarity on thequantum and usage of funds. Further, raising of funds through QIP and issue ofwarrants to promoters is also likely to remain an overhang on the stock as it will

result in equity dilution of ~20%.

% chg 9.2 37.1 7.5 11.0

% chg (27.8) (4.3) 59.8 11.0

EBITDA (%) 11.0 9.4 11.5 11.8

P/E (x) 9.7 10.4 6.5 5.9

P/BV (x) 1.8 1.5 1.2 1.0

RoE (%) 19.6 15.7 21.0 19.4

RoCE (%) 15.6 14.9 17.8 18.3

EV/Sales (x) 0.7 0.5 0.5 0.4

EV/EBITDA (x) 6.5 5.8 4.2 3.6


CMP `85

Target Price `97

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 43.4

MF / Banks / Indian Fls 18.3

FII / NRIs / OCBs 24.4

Indian Public / Others 13.9

Abs. (%) 3m 1yr 3yr

Sensex 4.4 10.9 23.4

Apollo Tyres 0.0 16.2 60.7

19,640

5,959

APLO.BO

4,276

1.3

102/71

412,377

1

2,377

Market Cap (`cr)

Beta

52 Week High / Low

Net Debt (`cr)

APTY@IN

Face Value (`)

BSE Sensex

Nifty

Reuters Code

Tyre

Avg. Daily Volume

022-3935 7800 Ext: 6844

[email protected]

Performance highlights

3QFY2013 Result Update | Auto Ancillary

February 6, 2013


2/15

Apollo Tyres | 3QFY2013 Result Update

February 6, 2013 2

Exhibit 1:Quarterly financial performance (Consolidated)

Consumption of RM 1,842 2,002 (8.0) 2,048 (10.0) 5,668 5,471 3.6(% of Sales) 57.3 62.0 60.7 58.1 61.3

Staff Costs 356 351 1.4 353 0.8 1,097 1,033 6.2

(% of Sales) 11.1 10.9 10.5 11.2 11.6

Purchase of traded goods 168 138 22.0 185 (9.2) 533 456 16.8

(% of Sales) 5.2 4.3 5.5 5.5 5.1

Other Expenses 469 405 15.9 422 11.2 1,359 1,157 17.4

(% of Sales) 14.6 12.5 12.5 13.9 13.0

OPM (%) 11.9 10.3 10.9 11.3 9.0

Interest 81 75 6.9 83 (2.8) 239 209 14.1Depreciation 92 82 11.6 91 0.8 277 235 17.6

Other Income 27 (2) (1,212.0) 14 91.8 51 16 216.1

Extr. Income/(Expense) - 29 - 0 - - 29 -

(% of Sales) 7.3 4.4 6.1 6.5 3.9

Provision for Taxation 56 44 25.7 53 4.4 163 93 75.8

(% of PBT) 23.6 31.1 25.9 25.7 26.8

Share in profit/(loss of asso. (1) (0) (1) (2) (1)

Minority interest 0 0 0 0 0

Adj. PATM 5.6 4.0 4.5 4.8 3.2

Equity capital (cr) 50.4 50.4 50.4 50.4 50.4


Exhibit 2:3QFY2013 Actual vs Angel estimates

EBITDA 382 408 (6.2)

EBITDA margin (%) 11.9 11.5 43bp


For 3QFY2013, APTYs consolidated

top-line stood flat at `3,217cr (down 4.7% qoq) which was lower than our

expectations of `3,559cr, mainly on account of lower-than-expected top-line

performance across the three geographies. The company registered a volume

decline of 3%, 1% and 3% yoy in India, Europe and South Africa operations

respectively during the quarter. As a result, top-line in India and Europe posted adecline of 2.7% (down 10.8% qoq) and 0.5% yoy (modest growth of 2.6% qoq)

respectively. While Indian operations were impacted by significant slowdown in the

medium and heavy commercial vehicle (MHCV) segment; Europe operations were


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February 6, 2013 3

under pressure due to the weak macroeconomic environment in the region. South

Africa operations too posted a modest growth of 5.8% yoy (3.6% qoq) as sales

continue to be impacted due to the availability of cheaper imports in the country.

Exhibit 3:Top-line stood flat


Exhibit 4:Revenue-mix Geography-wise


Exhibit 5:Segmental performance

India 2,036 2,093 (2.7) 2,283 (10.8) 6,471 5,899 9.7

SA 406 383 5.8 391 3.6 1,190 965 23.2

Europe 816 820 (0.5) 795 2.6 2,261 2,172 4.1

Others 53 35 50.1 49 7.7 152 76 99.1

India 169 123 37.3 179 (5.5) 520 327 59.3

SA 5 (30) - (4) - 6 (32) -

Europe 141 129 8.8 113 24.2 347 268 29.6

Others 4 (2) - 5 - 9 (4) -

India 8.3 5.9 7.9 8.0 5.5

SA 1.2 (7.8) (1.1) 0.5 (3.3)

Europe 17.2 15.8 14.2 15.3 12.3


On the operating front,

EBITDA margins expanded across the geographies led by receding raw-material

cost pressures (average natural rubber prices down by 14.5% yoy and 4% qoq). As

a result, the raw-material expenses declined by 6.1% qoq (10% yoy) during the

quarter. The consolidated EBITDA margin expanded ~100bp sequentially to

11.9%, against our expectations of 11.5%. The EBITDA margins in India, Europe

and South Africa expanded by 200bp, 160bp and 200bp to 10.1%, 4.8% and

20.1% respectively. However, higher advertisement expenditure towards brand

building led to a 210bp yoy and qoq increase in other expenses as a percentage

of sales which restricted further margin expansion.

2,369

2,730 2,8222,871

3,2283,231 3,165

3,3753,217

3.2

27.3

55.0

47.3

36.318.4

12.117.5

(0.3)

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

3QF

Y11

4QF

Y11

1QF

Y12

2QF

Y12

3QF

Y12

4QF

Y12

1QF

Y13

2QF

Y13

3QF

Y13

(%)(`cr) Net sales % chg

1,432

1,7621,961

1,845

2,0932,259

2,1522,283

2,036

300 354 280 302 383 339 393 391 406

649 623 604749 820 677 650

795 816

0

500

1,000

1,500

2,000

2,500

3Q

FY11

4Q

FY11

1Q

FY12

2Q

FY12

3Q

FY12

4Q

FY12

1Q

FY13

2Q

FY13

3Q

FY13

(`cr) India South Africa Europe


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February 6, 2013 4

Exhibit 6:Average natural rubber price trend


Exhibit 7:EBITDA margin improves to 11.9%


APTYs adjusted net profit registered a strong growth of 40.7% yoy (17.8% qoq) to

`180cr as against our expectations of `166cr. The bottom-line growth was

boosted by higher other income (on forex gains and insurance proceeds) and

lower tax rate (23.6% as against 31.1% in 3QFY2012 and 25.9% in 2QFY2013).

Exhibit 8:High other income and lower tax-rate aids net profit


78 72

98 102119

142

165 177

195

225 229211 203

191 193

181 174

0

50

100

150

200

250

3QFY09

1QFY10

3QFY10

1QFY11

3QFY11

1QFY12

3QFY12

1QFY13

3QFY13

(`/kg)

11.5 11.38.2 8.3 10.3

11.1 11.1 10.9 11.9

58.764.5 66.0 67.0 66.3 64.8

61.866.2

62.5

5.0

15.0

25.0

35.0

45.0

55.0

65.0

75.0

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

(%) EBITDA margin Raw-material cost/sales

121 193 77 78 98 157 138 152 181

5.1

7.1

2.7 2.73.0

4.9 4.4 4.5

5.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0

50

100

150

200

250

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

(%)(`cr) Net profit Net profit margin (RHS)


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February 6, 2013 5

Exhibit 9:Quarterly financial performance (Standalone)

Consumption of RM 1,373 1,537 (10.7) 1,636 (16.0) 4,514 4,345 3.9(% of Sales) 67.5 73.4 71.7 69.8 73.7

Staff Costs 110 96 15.1 107 2.7 327 274 19.3

(% of Sales) 5.4 4.6 4.7 5.1 4.6

Purchase of traded goods 71 63 12.3 67 6.3 202 185 8.9

(% of Sales) 3.5 3.0 2.9 3.1 3.1

Other Expenses 277 228 21.3 247 11.8 776 642 20.8

(% of Sales) 13.6 10.9 10.8 12.0 10.9

OPM (%) 10.1 8.1 9.9 10.1 7.7

Interest 67 64 5.1 69 (3.8) 198 175 13.4

Depreciation 55 47 16.7 55 - 164 134 23.1

Other Income 19 1 1,388.2 8 126.2 33 8 310.9

Extr. Income/(Expense) - - - - - - - -

(% of Sales) 5.0 2.9 4.8 5.0 2.6

Provision for Taxation 29 17 67.0 35 (17.1) 98 43 128.3

(% of PBT) 28.0 28.8 31.5 30.4 28.2

Adj. PATM 3.6 2.0 3.3 3.5 1.8

Equity capital (cr) 50.4 50.4 50.4 50.4 50.4


On a standalone basis, APTY

posted a 2.7% yoy (10.8% qoq) decline in the top-line to `2,036cr, which was

lower than our expectations of `2,328cr. The top-line performance was mainly

impacted due to the slowdown in the OEM demand for MHCV tyres which led to a

~3% yoy (~11% qoq) decline in standalone volumes. Nonetheless, the company

witnessed a healthy demand in the replacement segment. The net average

realization remained flat on a yoy as well as qoq basis led by better product-mix.


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February 6, 2013 6

Exhibit 10:Top-line down due to slowdown in demand


On a sequential basis, APTYs EBITDA

margin improved by a modest ~20bp to 10.1% despite the decline in

raw-material expenses, owing to the sharp increase in other expenditure. The other

expenditure as a percentage of sales jumped by 280bp sequentially as the

company increased its advertisement expenses in an attempt to enhance the brand

visibility. However, raw-material expenditure registered a decline of 16% qoq

primarily due to decline in natural rubber prices. On a yoy basis though, margins

expanded 200bp driven largely by easing of natural rubber prices.

Exhibit 11:Average raw-material cost trendNatural rubber 190 250 (24.0) 210 (9.5)

Nylon tyre cord fabric 235 223 5.4 250 (6.0)

Carbon black 80 73 9.6 80 0.0


For 3QFY2013, the standalone net profit declined

marginally by 1.8% qoq to `74cr largely due to the fall in the top-line. Higher

other income (at `19cr vs `8cr in 2QFY2013) also benefited the profitability during

the quarter. On a yoy basis, net profit witnessed a strong growth of 73.4% driven

by a strong operating performance.

1,432

1,762 1,961 1,845

2,0932,259

2,1522,283

2,036

8.2

34.274.9 56.9

46.2

28.2

9.8

23.7

(2.7)

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

0

500

1,000

1,500

2,000

2,500

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

(%)(`cr) Net sales yoy change (RHS)


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February 6, 2013 7

Exhibit 12:EBITDA margin at 10.1%


Exhibit 13:Net profit declines sequentially


Conference call Key highlights

According to the Management, the demand outlook remains weak across thethree geographies. The domestic demand continues to remain weak due to

the sharp decline in OEM truck sales. However double digit growth in the

replacement market has supported growth. Further, the demand in Europe is

also expected to remain sluggish in the near term. Industry volumes in Europe

have posted a 13% yoy decline in CY2012. APTY has indicated that it will

continue with production cuts across all its plants given the poor demand.

The company has indicated that the capacity utilization level remains in therange of 70-80% across the three geographies.

The Management expects raw-material prices to remain stable in the nearterm led by slowdown in demand in the global markets.

At the Chennai plant, the company has ramped up capacity to ~400TPD;however, due to weak demand the Chennai plant is currently operating at a

capacity of ~300TPD.

The company has deferred the QIP issue of US$150mn until announcement of4QFY2013 results due to the pricing issue. APTY intends to raise money

primarily to fund its capacity expansion plans.

The Management stated that product prices have not been reduced despite thedecline in raw-material prices.

The European operations during the quarter were impacted due to late onsetof the winter season and also due to higher dealer inventory. The company

intends to increase the capacity at the Netherlands plant by 20% over the next

two years by incurring an expenditure of ~EUR50mn.

The consolidated net debt came down from `2,900cr to `2,700cr currently. Regarding the new plant in Thailand for passenger car tyres, the company is

close to finishing the due diligence exercise with respect to land acquisition. It

is planning to set up an initial capacity of 16,000 tyres/day at an investment of

US$250mn. The plant is likely to commence production by end of CY2014.

10.4 7.6 7.6 7.3 8.1 9.5 10.3 9.9 10.1

69.375.3 77.0 77.0 76.5 75.5 72.9 74.6 70.9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

(%) EBITDA margin Raw material cost/sales

54 66 44 22 43 72 75 75 74

3.8 3.8

2.3

1.2

2.0

3.2

3.53.3

3.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

10

20

30

40

50

60

70

80

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

(%)(`cr) Net profit Net profit margin (RHS)


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February 6, 2013 8

Investment arguments

Currently, manufacturing radial tyres isfar more capital intensive than manufacturing cross-ply tyres. The investment

required for radial tyres per tpd is 3.2x that of cross-ply tyres at `6.1cr/tpd.

On the other hand, the selling price of radial tyres is ~20% higher than that of

cross-ply tyres. Thus, to generate a similar RoCE and RoE, tyre companies

would need to earn EBITDA margin of ~21% compared to ~9% earned on

cross-ply tyres, considering the difference in capital requirements and the

consequent impact on asset turnover, interest cost and depreciation.

Therefore, higher capital requirements will help protect margins from

upward-bound input costs, as the business model evolves, bearing in mind

final RoEs rather than margins. With the sector set for a structural shift and the

apparent pricing flexibility, RoCE and RoE of tyre manufacturers are expected

to improve going forward.

The Indian tyre industry is currentlywitnessing a slowdown in demand from the replacement as well as OEM

markets, primarily due to macro-economic concerns. However the demand

scenario in the long term remains encouraging which will aid APTY to operate

at optimal capacities.

Acquisitionsdone by the company in the past two-three years are increasingly contributing

to its revenue. We estimate Vredestein Banden combined with Dunlop SA to

contribute close to ~35% to the companys overall consolidated revenue,helping it to further strengthen its foothold in the Indian tyre industry.

Acquisitions offer synergies by way of access to radial tyre technology, wider

product portfolio and presence in newer geographies.

We lower our volume estimates for FY2013/14 to account for the subdued

demand scenario in the key geographies of India and Europe. Nonetheless, our

earnings estimates for FY2013 are revised upwards as we factor in the higher

other income during the quarter.

Exhibit 14:Change in estimates

OPM (%) 11.2 11.2 11.5 11.8 30 bp 55 bp


We remain positive on the tyre industry in view of the structural shift that the

industry is witnessing and also due to the softening of natural rubber prices.However, we remain watchful of the capital expenditure plans of the company in

the absence of proper clarity on the quantum and usage of funds. Further, raising

of funds through QIP and issue of warrants to promoters is also likely to remain an


9/15


February 6, 2013 9

overhang on the stock as it will result in equity dilution of ~20%. Nevertheless, at

`85, the stock is trading at an attractive valuation of 5.9x FY2014E.

A sharp rise in input costs from current levels,

slower growth in international business and lower-than-anticipated domestic

replacement demand pose downside risks to our estimates.

Exhibit 15:Angel vs consensus forecast

EPS (`) 13.0 14.5 12.1 13.9 8.0 4.0


Exhibit 16:One-year forward P/E band


Exhibit 17:One-year forward P/E chart


Exhibit 18:One-year forward EV/EBITDA band


Exhibit 19:One-year forward EV/EBITDA chart


0

20

40

60

80

100

120

140

160

180

Apr-

03

Fe

b-04

Jan-05

Dec-05

Oct-06

Sep-07

Aug-08

Jun-09

May-10

Apr-

11

Fe

b-12

Jan-13

(`) Share Price (`) 2x 5x 8x 11x

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Ju

l-05

Dec-05

May-06

Oct-06

Mar-

07

Aug-07

Jan-08

Jun-08

Nov-08

Apr-

09

Sep-09

Fe

b-10

Ju

l-10

Dec-10

May-11

Oct-11

Mar-

12

Aug-12

Jan-13

(x) One-yr forward P/E Five-yr average P/E

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Apr-

03

Jan-0

4

Oct-04

Ju

l-05

Apr-

06

Jan-0

7

Oct-07

Ju

l-08

Apr-

09

Jan-1

0

Oct-10

Ju

l-11

Apr-

12

Jan-1

3

(`cr) EV (`cr) 2.0 4.0 6.0 8.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Ju

l-05

Apr-

06

Dec-0

6

Aug-0

7

Apr-

08

Dec-0

8

Aug-0

9

Apr-

10

Jan-1

1

Sep-1

1

May-1

2

Jan-1

3

(x) One-yr forward EV/EBITDA Five-yr average EV/EBITDA


10/15


February 6, 2013 10

Exhibit 20:Auto Ancillary Recommendation summary

Ceat Buy 103 163 58.2 3.8 2.5 3.3 2.8 13.2 17.2 279.5

JKI* Buy 114 165 44.3 3.1 2.8 5.2 4.2 18.8 17.8 -

Source: Company, Angel Research; Note: *Consolidated

Company background

Apollo Tyres (APTY) is India's second largest tyre manufacturer with an overall tyre

market share of ~18%. The company has a leadership position in the heavy and

light commercial vehicle tyre segments, with a 23% and 26% market share

respectively. APTY acquired Dunlop's South African operations in 2006 and

Vredestein Branden BV (Netherlands) in May 2009. These acquisitions now

account for ~35% of APTY's consolidated revenue. The company has eight

manufacturing plants located across India (1,125TPD), South Africa (175TPD) and

Europe (170TPD), with a total installed capacity of 1,470TPD. APTY's main brands

include Apollo (India); Dunlop (South Africa); and Maloya, Regal and Vredestein

(Europe).


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February 6, 2013 11

Profit and loss statement (Consolidated)

% chg 6.4 62.6 9.2 37.1 7.5 11.0

Net raw material costs 3,411 4,581 5,322 8,037 8,297 9,173

Other mfg costs 337 539 629 746 823 914

Employee expenses 415 1,088 1,134 1,335 1,450 1,624

Other 410 727 810 889 993 1,088

% chg (29.3) 180.7 (18.0) 17.9 31.1 13.4

(% of total op. income) 8.5 14.6 11.0 9.4 11.5 11.8

Depreciation & amortization 129 254 272 326 375 391

% chg (37.2) 216.9 (24.8) 17.2 37.5 16.4


Interest and other charges 112 134 204 297 319 348

Other income 31 177 62 32 75 50

% chg (47.5) 357.3 (42.6) (0.5) 59.1 14.9

Extraordinary items (1) 59 11 (1) - -

Tax 74 261 106 144 225 284

(% of PBT) 34.8 28.5 19.4 25.9 25.5 28.0

PAT (reported)

Minority interest 0 0 1 2 2 2

% chg (48.1) 325.3 (27.8) (4.3) 59.8 11.0


% chg (49.7) 325.3 (27.8) (4.3) 59.8 11.0


12/15


February 6, 2013 12

Balance sheet statement (Consolidated)

Equity share capital 50 50 50 50 50 50Reserves & surplus 1,299 1,917 2,362 2,782 3,379 4,048

Minority Interest - - 1 1 1 1

Total loans 891 1,707 2,222 2,550 2,750 3,000

Deferred tax liability 194 251 316 403 403 403

Other long term liabilities 21 45 45 45

Long term provisions 107 94 94 94

Gross block 2,284 5,563 6,895 8,034 8,515 9,091

Less: Acc. depreciation 882 3,120 3,501 4,011 4,385 4,776

Capital work-in-progress 281 536 358 331 350 374

Goodwill 24 118 125 134 134 134

Long term loans and advances - - 264 221 221 221

Other noncurrent assets - - - - - -

1,423 2,439 3,154 3,667 4,388 5,239

Cash 362 349 191 173 490 776

Loans & advances 206 310 258 349 457 508

Other 855 1,780 2,705 3,145 3,441 3,955

Current liabilities 700 1,614 2,227 2,467 2,516 2,657


13/15


February 6, 2013 13

Cash flow statement (Consolidated)

Profit before tax 213 973 558 556 884 1,015

Depreciation 129 254 272 326 375 391Change in working capital 32 (115) (261) (291) (390) (457)

Others 212 637 16 345 - -

Other income (31) (177) (62) (32) (75) (50)

Direct taxes paid (74) (261) (106) (144) (225) (284)

(Inc.)/Dec. in fixed assets (517) (3,627) (1,161) (1,121) (500) (600)

(Inc.)/Dec. in investments 0 (1) (5) (5) - -

Other income 31 177 62 32 75 50

Issue of equity 46 - - - - -

Inc./(Dec.) in loans 245 816 515 328 200 250

Dividend paid (Incl. Tax) 27 44 29 29 29 29

Others (234) 1,266 (14) (59) - -

Inc./(Dec.) in cash 77 (13) (158) (18) 317 286


14/15


February 6, 2013 14

Key ratios

P/E (on FDEPS) 30.7 6.5 9.7 10.4 6.5 5.9P/CEPS 16.0 5.0 6.1 5.8 4.1 3.8

P/BV 3.2 2.2 1.8 1.5 1.2 1.0

Dividend yield (%) 0.5 0.9 0.6 0.6 0.6 0.6

EV/Sales 1.0 0.7 0.7 0.5 0.5 0.4

EV/EBITDA 11.4 4.8 6.5 5.8 4.3 3.8

EV / Total Assets 2.0 1.4 1.2 1.1 1.0 0.8

EPS (Basic) 2.8 13.0 8.7 8.1 13.0 14.5

EPS (fully diluted) 2.8 11.8 8.5 8.1 13.0 14.5

Cash EPS 5.3 16.8 13.9 14.6 20.4 22.2

DPS 0.4 0.7 0.5 0.5 0.5 0.5

Book Value 26.8 39.0 47.9 56.2 68.0 81.3

EBIT margin 5.9 11.5 7.9 6.8 8.6 9.1

Tax retention ratio 0.7 0.7 0.8 0.7 0.7 0.7

Asset turnover (x) 2.6 2.9 2.1 2.3 2.2 2.2

ROIC (Post-tax) 10.1 23.6 13.3 11.4 14.0 14.4

Cost of Debt (Post Tax) 9.5 7.4 8.4 9.2 9.0 8.7

Leverage (x) 0.3 0.6 0.8 0.8 0.7 0.6

Operating ROE 10.3 32.7 17.1 13.3 17.7 17.8

ROCE (Pre-tax) 13.2 29.3 15.6 14.9 17.8 18.3

Angel ROIC (Pre-tax) 14.2 26.0 14.3 14.3 18.1 19.1

ROE 11.0 35.8 19.6 15.7 21.0 19.4

Asset Turnover (Gross Block) 2.4 2.1 1.4 1.6 1.6 1.8

Inventory / Sales (days) 49 36 57 56 63 66

Receivables (days) 20 23 36 31 33 33

Payables (days) 47 41 65 59 58 55

WC cycle (ex-cash) (days) 28 19 25 26 34 40

Net debt to equity 0.4 0.7 0.8 0.8 0.7 0.5

Net debt to EBITDA 1.2 1.1 2.1 2.1 1.5 1.3

Interest Coverage (EBIT / Int.) 2.6 6.9 3.4 2.8 3.5 3.8


15/15


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Disclosure of Interest Statement Apollo Tyres

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

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Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

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Documents

Apollo Tyres, 8th February, 2013