Equity Valuation of Apollo Tyres: ADM4350 Finance Case Study Analysis

This case study provides an in-depth analysis of Apollo Tyres' equity valuation. It begins with an overview of the company, including its history, operations, and revenue generation strategies, with a particular focus on market segmentation and product lines. The financial snapshot section presents a detailed examination of the company's market capitalization, revenue streams, and net income, highlighting trends and changes over time. The analysis extends to the geographical distribution of the company's operations and its product lines, offering a comprehensive view of Apollo Tyres' business model. The study incorporates data from various financial reports and external sources to support its findings, offering a detailed understanding of the company's financial performance and market position. The assignment also provides context for the case study, including the assignment brief, which outlines the requirements and objectives of the equity valuation analysis. The solution follows the professor's layout, presenting the analysis in a PowerPoint format, as requested in the assignment brief.

Equity valuation
• Apollo Tyres
• Name of the student
• Institutional affiliation

Description Of Apollo Tyres
•Apollo Tyres was Established in the year 1976. It is an Indian corporation
with headquarters in gurgaon. Apollo tyres is India's leading tire manufacturer
behind MRF.
•The company has been involved in a variety of mergers with companies from
other countries (Business Standard 2020). Such corporations include the unite
states-based general tire international company.
•The company has over the years expanded its top product lines at an estimated
27% CAGR in the past five years (Business Standard 2020). such growth is
facilitated by factors such as organic investment, and other strategic decisions.

How Apollo Tyres Generates Revenue
•Apollo tyres generates primarily through carrying out market segmentation.
The market segmentations of the company include the south African market, the
European market, Indian market segment among others ( ollo T res tdAp y L , 2019).
•Concerning the aspect of revenue generation for example, Apollo tyres has the
replacement market segmentation contributing to about 56% of revenue.
•Apollo tyres also uses product segmentation as another way of generating
revenue. For instance, the company trucks, buses as well as passenger cars are the
biggest revenue drivers.

Financial snapshot matrix:
• M T CARKE AP
• After the year 2010, the share price of Apollo tyres is declining. For example the period between
2010 and 2012 resulted into only 12% return in the share price of the company. the implication here is
that the company is has lost value in its market capitalization. As a result, a single company share cost
about INR79. 65 during the 2010 -2012 period.
• Such a share implies that Apollo company was valued at only INR40 billion.
• However, according to the latest financial information, the company share price stand at about INR
174. 65. the company hares are also estimated at about 1,515,394 shares. The current market cap of the
company is valued at about INR 10002.29.

Revenue
•The company’s total revenue is estimated to have an increase to about Rs 4,358.
78 in 2019 from the Rs 4, 328.6 in 2018 (Apollo Tyres,2018). within the Indian
market or segment, the company revenues rose by about 1% representing Rs 3, 044
Crore (Apollo Tyres,2018). The revenues from European operations on the other
hand rose by around 5% in the period between April and June 2019 ollo T res(Ap y
tdL ,2019).
•The trucks and other vehicles are known to be contributing to about 65 and 16%
of the revenues respectively (Apollo Tyres,2018).

Net income
•Apollo Tyres Net Sales net sales or incomes are currently estimated to have
increased to about Rs 4,272 compared to the Rs 4, 249 recorded previously.
•The company consolidated net profits on the other hand have declined. For
example the company reports show that there is a 43.8% annual decline in the
consolidated net revenues. The percentage decline caters for about Rs 141.6.

Revenue matrix analysis
• GEOGRAPHY
• Geographically, Apollo tyres is both an international and domestic company. On
the global scene, the company operates in a variety of regions such as Europe, south
Africa, the United States Of America among others (Apollo Tyres, 2018).
• All these international markets, Apollo utilizes the acquisition method of market
entry. For example Apollo acquired companies such as vredestein (Netherlands) in
2009 and Dunlop tyres international ltd in 2006 in Europe and south Africa
respectively (Apollo Tyres, 2018).

Product Lines
•Apollo tyres company ltd operates specifically four major product units in
India, two in south Africa, and two in Zimbabwe (Narasimhan, 2016).
•The company product lines include passenger cars (radial, crossplay and
SUVs). Among other product lines of the company include the acelere wheelz, light
trucks, Dura tyres and treads, among others (Narasimhan, 2016). The company is
further known for operating a multi-product line strategy.

References
• ollo T res td e ort etrie ed froAp y L .(2019).R p 2018-19. R v m
tt s a ollo edias s eu entral a a ona s o digital annualh p :// p m . 3. -c -1. m z w .c m/ - -
re ort i ages oards e ort dfp /2019/ m /B -R p .p
• ollo T res nnual e ort retrie ed froAp y . (2018). A R p 2018. v m
tt s a ollot res o in estors digital annual re ort t l ageh p ://www. p y .c m/ v / - - p .h m #p -
one

eferen es ont dR c : c ’
• usiness tandard ollo T res i ited etrie ed froB S . (2020). Ap y L m . R v m
tt s business standard o o an a ollo t res infor atih p ://www. - .c m/c mp y/ p - y -23/ m
on o an istor/c mp y-h y
• arasi an T ollot res Treads T e Multi rodu t oad ToN mh , ., (2016). Ap y h -p c R
u ess etrie ed froS cc . R v m
tt s business standard o arti le o anies a ollo t resh p ://www. - .c m/ c /c mp / p - y -
treads t e ulti rodu t road to su ess t l- h -m -p c - - - cc -116091400883_1.h m