Buy Apollo Tyres, target 84: IndiaInfoline

Bangalore: IndiaInfoline is bullish on Apollo Tyres and has recommended a buy rating on the stock with a target price of 84. According to the brokerage, Indian auto component manufacturers have registered an improved financial performance in the past couple of quarters on the back of higher volumes arising from the domestic market. Cost cutting initiatives, improved productivity and better financial management during the meltdown provided additional traction to their financial performance.

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Apollo Tyres is an India-based tyre manufacturer, which produces a range of automotive tyres for passenger cars, truck and bus, farm, off-The-Road, industrial and specialty applications like mining, retreaded tyres, and retreading material. These are produced across Apollo's eight manufacturing locations in India, Netherlands and Southern Africa. Its brands include Apollo, Dunlop, Kaizen, Maloya, Regal and Vredestein. Its subsidiaries include Apollo (Mauritius) Holdings, Apollo (South Africa) Holdings, Apollo Tyres South Africa, Dunlop Africa Marketing and Dunlop Zimbabwe. On May 15, 2009, the company completed the acquisition of Vredestein Banden, a Dutch company.

IndiaInfoline believes that replacement demand and higher radialization of CV tyres to drive domestic performance of Apollo Tyres and its foreign subsidiaries to gain from global economic recovery. With the recommended target price of 84, if the stock is bought at Thursday's closing price of 74.45, the percentage of gain would be 12.82 percent.