Apollo Tyres Limited

Overview :
Apollo Tyres limited (ATL) were established on 28th September ,1972 as a public limited
company and Acquired its Commencement of business certificate on October 24,1972. The
initial promoters are Bharat Steel Tubes ltd, Raunaq International Pvt.ltd, Raunaq &
Co.pvt.ltd., The major stream of business of company is manufacturing of automobiles Tyres
and Tubes ,Camel back/Retreading Materials and Rubber Conveyor belts, Initially they
issued 15,00,000 No of shares to Bharat Steels Tubes Ltd and 25,00,000 shares to
Government of Kerala and 13,50,000 no of equity shares to promoters and associate
companies 75000 preference shares & 46,50,000 shares to Initial Public offering. In the
earlier days the company collaborated with US based General Tire International Co., for the
Exchange of Technology in the manufacturing of Tyres. In 1989 they launched Radial tires
for Maruti cars and Premium Tyres for trucks , In 2017 they ties up with Crystal Palace
Football club to develop its reputation entire Globe.

Management of the company :

The company has its headquarters at kochi,kerala,India. The Management of the Apollo
Tyres limited, the company has 11 independent Directors and One whole time director
along with Chairman and Vice chairman in the Board of Directors

Name Designation Qualification

Onkar S Kanwar Chairman & He is an Undergraduate in business
Managing Director Administration and Industrial Engineering ,He
worked with Organizations like Riverside,
California ,Abbey Etna Machine Company in
Perrysburg
Neeraj Kanwar Vice chairman & He was educated at St. Columbia School, Delhi
Managing Director and thereafter Graduated in Engineering from
Lehigh university in Pennsylvania, USA. He
started his career with American Express Bank
in New York ,he later started his own venture
named as Global Finance limited and get into
his parent Company Later in 1985.
Satish Sharma Whole Time Director He is a Graduate from NIT Raipur and Later
Pursued PGDBM from Institute of
Management Technology Ghaziabad. And
Joined with Apollo Tyres and become as a
President of APMEA

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List of Directors in Apollo Tyres Ltd
Name Designation
Sunam Sarkar Independent Director
Nimesh N Kampani Independent Director
S Narayan Independent Director
Bikram Singh Independent Director
Francesco Gori Independent Director
Pallavi Shroff Independent Director
Akshay Chudasama Independent Director
Robert Steinmetz Independent Director
Vikram S Mehta Independent Director
Vinod Rai Independent Director
Anjali Bansal Independent Director

The Company is a Family Operated as the 3rd Generation of the Apollo Tyres Limited Were
Operating the Company that Floated by their Grand Parents In 1972.

Swot Analysis :
Strengths Weakness
• Brand Image in the Industry • Heavy Dependence on Indian
• Financial Performance Market
• Focus on Research and • Labor Issues Facing by the Company
Development consistently
• Market share
Opportunities Threats
• Development in 4-wheeler Market • Volatility in rubber industry
industry in India • Importing Cheaper Tyres from China
• Expansion into two-wheeler
industry
• Global Marketing/Expansion

Strengths :

• Brand Image in the Industry : Apollo has Its Unique Brand worthiness in the industry.
They have a Manufacturing Units in India, Netherlands and South Africa and its sells
its Tyres in India, Africa and Europe.
• Strong Financial Performance : Sales grew from CAGR of 2 % in the last 5 years and
Its profit Grew at CAGR of 34 % from last % years
• Research and Development : They Emphasize their R&D Activities by Improving
Durability, Grip as a primary focus
• Market Share : It has 2nd highest market share in LCV’s and Highest Market share in
Medium and Heavy commercial vehicles.

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 Weakness :

• Heavy dependence on Indian market is one of the weakness for the company ,it
looks secured in short term but when we look at the long-term future growth of
company ,expansion plays a key role in growth of the company
• Labor issues by lockout in various areas like Durban, Vadodara makes a threat call to
the company.
Opportunities :

• Expansion into two-wheeler markets is the one of the opportunities that company
has in front of its strategies because the brand is well recognized in 4-wheeler
segment and has a brand worthiness in the industry
• Global expansion ,the company is expanding its activities from last 3-year different
parts of globe like Europe, Africa and they have a high probability of expanding its
sales to rest of the country .
Threats :

• Volatility in Rubber industry , In India the Rubber production is much lower than the
usual demand ,that is one of the threats which disturbs the production of the
company
• Imports from cheaper markets like China impacts the sales in India sometimes.

Comparative analysis
Companies=> Apollo Tyres ltd MRF JK Tyre & Ind Ceat
Ratios
Profitability ratios
Return on net worth 7.75 10.29 10.24 10.50
Return on assets 4.38 6.01 2.76 4.76
Liquidity ratio
Current ratio 1.35 1.53 1.04 0.95
Inventory turnover ratio 6.02 5.37 6.70 7.08
Dividend payout ratio 16.52 1.33 16.64 10.04
Valuation Ratios
EV/EBITDA 9.56 9.77 6.40 8.23
Price/Book value 1.66 2.31 1.13 1.65

Analysis
Profitability ratios :
Return on net worth : it shows that how the companies’ revenue is adequate for the
instant liquidation of Equities of the companies ,usually while comparing between two
companies we consider higher return on net worth as a profitable factor of the company .
Here CEAT’s Return on Net worth has a higher advantage over the market

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Return on assets: it indicates how well the company is utilizing its assets at its full potential,
it is the best ratio to compare the performance of the company, here MRF’s ROA is high
indicating they have a good performance accordingly.
Liquidity Ratios
Current ratio: it defines whether the company has a potential to liquidate its short-term
assets quickly ,in this scenario the company has decent amount of current ratio to redeem
its short-term assets.
Inventory turnover ratio: it shows how the inventory selling out during the entire year,
higher the ratio ,lower the inventory holding costs, in this comparison Apollo Tyres has
inventory turnover ratio equivalent to industry average ,so it is a good sigh to invest
accordingly because they have positive net sales.
Dividend payout ratio: it shows how the company paying dividend to its share holders out
of its retained earnings ,here the dividend payout ratio is 16.52 per share which indicates a
good amount of return to the share holders
Valuation Ratios
EV/EBITDA: This ratio helps us to compare the two companies relatively ,this is one of the
best method available out there which considers the enterprise value as a key component,
the enterprise value usually resides between 11 to 19 % for every company.

Conclusion:
Apollo Tyres limited is one of the pioneers in the Indian Tyres manufacture, they have a
brand value in India which opens platform to get into two wheeler Tyres manufacturing and
their valuation ratios and profitability ratios shows a stability in the industry , Recent
expansion to foreign markets indicates that there is a high productivity and sales in the
market. Which is a good factor for the investor to invest in the company ,from the Swot
analysis we can understand it is a well-established venture in the market because of lower
threats and weakness .