Apollo Tyres Ltd. is Rated Buy by MarketsMOJO

Current Rating and Its Significance

On 04 February 2026, MarketsMOJO assigned Apollo Tyres Ltd. a 'Buy' rating, reflecting a positive outlook on the stock’s potential. This rating is supported by a Mojo Score of 71.0, indicating a favourable combination of quality, valuation, financial health, and technical indicators. For investors, a 'Buy' rating suggests that the stock is expected to outperform the broader market or its sector peers over the medium term, making it a compelling addition to a diversified portfolio.

Quality Assessment

As of 15 February 2026, Apollo Tyres demonstrates a strong quality profile. The company holds a 'good' quality grade, underpinned by its robust ability to service debt, with a low Debt to EBITDA ratio of 1.40 times. This indicates prudent financial management and a manageable debt burden relative to earnings. Additionally, the company’s long-term growth trajectory remains healthy, with net sales expanding at an annualised rate of 11.60% and operating profit growing at 16.45% per annum. These figures reflect consistent operational efficiency and market demand for its products.

Valuation Perspective

The valuation grade for Apollo Tyres is currently 'attractive'. The stock trades at an Enterprise Value to Capital Employed ratio of 1.8, which is below the average historical valuations of its peers in the Tyres & Rubber Products sector. This discount suggests that the market may be undervaluing the company relative to its capital base and earnings potential. Furthermore, the company’s Return on Capital Employed (ROCE) stands at 11.3%, signalling efficient use of capital to generate profits. For value-conscious investors, this combination of solid returns and reasonable valuation presents an appealing investment opportunity.

Financial Trend and Recent Performance

The financial trend for Apollo Tyres is positive, supported by recent quarterly results ending December 2025. The company reported its lowest Debt-Equity ratio at 0.29 times, highlighting a conservative capital structure. Operating profit to interest coverage reached a high of 11.85 times, indicating strong earnings relative to interest expenses. Net sales for the quarter were also at a record high of ₹7,743.08 crores, reflecting robust demand and effective sales strategies.

Despite these positives, it is important to note that profits have declined by 5.7% over the past year. However, the stock has still delivered a healthy 16.37% return over the same period as of 15 February 2026, suggesting that market sentiment remains optimistic about the company’s future prospects.

Technical Outlook

From a technical standpoint, Apollo Tyres is rated as 'mildly bullish'. The stock has experienced some short-term volatility, with a 1-day decline of 1.85% and a 1-month drop of 5.86%. However, over the last six months, the stock has gained 10.07%, indicating underlying strength. The mildly bullish technical grade suggests that while the stock may face intermittent corrections, the overall trend remains upward, supporting the 'Buy' rating.

Institutional Confidence

Another factor reinforcing the stock’s appeal is its high institutional holding of 41.73%. Institutional investors typically possess greater analytical resources and market insight, and their significant stake often signals confidence in the company’s fundamentals and growth prospects. This level of institutional interest can provide stability to the stock price and reduce volatility caused by retail trading fluctuations.

Investor Takeaway

For investors considering Apollo Tyres Ltd., the current 'Buy' rating reflects a balanced assessment of the company’s strengths and challenges. The stock’s attractive valuation and solid quality metrics provide a foundation for potential capital appreciation. Meanwhile, the positive financial trend and supportive technical signals suggest that the company is well-positioned to navigate near-term market fluctuations.

However, investors should remain mindful of the recent profit decline and short-term price volatility. A diversified approach and ongoing monitoring of quarterly results and sector dynamics will be prudent. Overall, Apollo Tyres offers a compelling opportunity for those seeking exposure to the Tyres & Rubber Products sector with a favourable risk-reward profile as of 15 February 2026.

Summary of Key Metrics as of 15 February 2026

- Mojo Score: 71.0 (Buy Grade)
- Debt to EBITDA Ratio: 1.40 times
- Debt-Equity Ratio (HY): 0.29 times
- Operating Profit to Interest Coverage (Quarterly): 11.85 times
- Net Sales (Quarterly): ₹7,743.08 crores
- ROCE: 11.3%
- Enterprise Value to Capital Employed: 1.8
- 1-Year Stock Return: +16.37%
- Profit Change (1 Year): -5.7%
- Institutional Holdings: 41.73%

These figures collectively underpin the current 'Buy' rating and provide a comprehensive view of Apollo Tyres’ investment case.

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