Shares of Apollo Tyres Ltd rose 2.24% to ₹416.95 in Friday’s session, following a strong endorsement from global brokerage firm CLSA, which initiated coverage on the tyre sector with a bullish outlook. The brokerage gave Apollo Tyres a ‘High Conviction Outperform’ rating and set a target price of ₹566, citing structural margin tailwinds and disciplined capital management.
CLSA noted that the ₹1 lakh crore Indian tyre market is entering a favourable margin cycle, supported by softening input costs, an improved product mix, and growing demand for passenger car radials (PCRs) amid rising vehicle ownership.
Among key picks in the sector, CLSA highlighted:
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MRF Ltd: Overweight, TP ₹1,28,599
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CEAT Ltd: Outperform, TP ₹3,493
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Apollo Tyres: High Conviction Outperform, TP ₹566
Apollo Tyres, with a market cap of ₹264.68 billion, is trading comfortably within its 52-week range of ₹370.90 to ₹584.90, and investors are eyeing the firm’s ability to maintain robust free cash flows and enhance return metrics.
As per CLSA, free cash flow in the tyre sector is less dependent on revenue growth and more on margin cycles, and Apollo is strategically placed to benefit from the ongoing uptrend heading into FY26.
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