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Goldman Sachs downgrades Apollo Tyres ahead of earnings

Source : REUTERS
Last Updated: Thu, May 09, 2013 04:49 hrs
A Goldman Sachs sign is seen above their booth on the floor of the New York Stock Exchange

Goldman Sachs downgrades Apollo Tyres Ltd to "neutral" from "buy", also removing it from its Asia Pacific buy list citing limited upside to its new target price of 103 rupees.

The investment bank adds that, structurally, it still believes the Indian tyre industry faces high earnings volatility across the cycle, with 12-18 percent sustainable return-on-equity for Apollo Tyres versus 20 percent expected in FY14E.

In the near term, it adds that softness in natural rubber prices may act as a strong tailwind to the company's earnings as well.

Apollo Tyres will report March-quarter results on Friday.


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