Apollo Tyres shares: Morgan Stanley sees 21% downside post Q3 earnings, stock gives up record high

Shares of Apollo Tyres Ltd hit their record high in early trade today after the firm reported its Q3 earnings. Revenue from operations rose 2.7 per cent to Rs 6595.4 crore compared to Rs 6422.8 crore in the year-ago period.

Global brokerage firm Morgan Stanley has assigned an ‘equal weight’ call on Apollo Tyres with a target price of Rs 433. This signals a likely downside of over 21 percent from the previous close of Rs 552. Analysts at Morgan Stanley said that the revenue was lower than the estimates.

Apollo Tyres stock opened in the green at a high of Rs 559.85 against the previous close of Rs 552.25 on BSE. Later, the stock fell 3.44% from its high to Rs 540.20 on BSE. The earnings were announced after market hours on Wednesday.

Shares of Apollo Tyres are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The stock has gained 63% in a year and gained 20% in 2024. Total 0.73 lakh shares of the firm changed hands amounting to a turnover of Rs 4.03 crore. Market cap of the firm rose to Rs 34,447 crore.

The company’s shares have a beta of 0.3, indicating very low volatility in a year. Apollo Tyres stock hit a 52 week low of Rs 303.85 on March 14, 2023.

In terms of technicals, the relative strength index (RSI) of the stock stands at 75.1, signaling it's trading in the overbought zone. Apollo Tyres shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Apollo Tyres’ net profit climbed 78.1per cent in Q3 to Rs 496.6 crore against a net profit of Rs 278.8 crore in the third quarter of previous fiscal.

At the operating level, EBITDA surged 32.2% to Rs 1,208.1 crore in the third quarter against Rs 913.4 crore in the corresponding period in the previous fiscal.

EBITDA margin came at 18.3% in Q3 against 14.2% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

Also read: Stock recommendations by analyst for February 8, 2024: SBI, Motherson and Intellect

Also read: IREDA shares down 10% in two days; analysts hint at bearishness in near term