Current Rating and Its Implications for Investors
The 'Hold' rating assigned to Apollo Tyres Ltd. indicates a neutral stance, suggesting that investors should maintain their existing positions rather than aggressively buying or selling the stock at this time. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall Mojo Score of 65.0, which places the stock in the 'Hold' category according to MarketsMOJO’s grading system.
Quality Assessment
As of 24 January 2026, Apollo Tyres demonstrates a good quality grade. The company maintains a strong ability to service its debt, reflected in a low Debt to EBITDA ratio of 1.40 times. This indicates prudent financial management and a manageable debt burden relative to earnings. Furthermore, the firm has exhibited healthy long-term growth, with net sales increasing at an annual rate of 12.01% and operating profit growing at 25.12%. These figures underscore the company’s operational efficiency and capacity to expand its business sustainably over time.
Valuation Considerations
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. Additionally, the company’s return on capital employed (ROCE) stands at 11.3%, which supports the view that the stock is reasonably priced given its earnings efficiency. Investors looking for value opportunities may find this aspect encouraging, although it is balanced by other factors in the overall rating.
Financial Trend and Profitability
The financial trend for Apollo Tyres is currently flat, reflecting some challenges in recent profitability metrics. The latest data as of 24 January 2026 shows that the company’s profit after tax (PAT) for the nine months ended September 2025 was ₹784.61 crores, representing a decline of 22.27% compared to the previous period. Additionally, the return on capital employed for the half year was at a low of 11.19%, and the debtors turnover ratio was 8.15 times, also at a low point. These indicators suggest that while the company maintains operational stability, recent profit margins and asset utilisation have softened, which tempers the overall outlook.
Technical Analysis
From a technical perspective, Apollo Tyres is mildly bullish. The stock has delivered a positive return of 13.96% over the past year as of 24 January 2026, outperforming the BSE500 index over the last one year, three months, and three years. Shorter-term price movements show some volatility, with a one-day decline of 0.62% and a one-month decrease of 2.37%. However, the six-month return remains robust at 9.39%, indicating underlying strength in the stock’s price momentum. The high institutional holding of 41.73% further supports the technical outlook, as these investors typically have the resources to analyse fundamentals thoroughly and maintain confidence in the stock’s prospects.
Summary of Current Position
In summary, Apollo Tyres Ltd. presents a mixed but balanced investment profile as of 24 January 2026. The company’s good quality fundamentals and attractive valuation are offset by flat financial trends and moderate technical signals. The 'Hold' rating reflects this equilibrium, advising investors to maintain their current holdings while monitoring future developments closely. The stock’s market-beating returns over the medium to long term provide a positive backdrop, but recent profit declines warrant caution.
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Investor Considerations and Outlook
Investors should note that while Apollo Tyres has demonstrated resilience in a competitive sector, the recent flat financial trend and profit contraction highlight the importance of monitoring upcoming quarterly results and sector dynamics. The tyre industry faces cyclical pressures, raw material cost fluctuations, and evolving demand patterns, all of which can impact profitability. The company’s strong institutional backing and solid debt metrics provide a cushion against volatility, but the valuation and technical signals suggest a cautious approach.
Long-Term Growth Prospects
Looking ahead, Apollo Tyres’ long-term growth remains promising given its consistent sales expansion and operational improvements. The company’s ability to maintain a low debt burden while growing operating profits at over 25% annually is a positive sign for sustained value creation. However, investors should weigh these strengths against the recent earnings softness and market conditions before making significant portfolio adjustments.
Conclusion
In conclusion, the 'Hold' rating for Apollo Tyres Ltd. as of 12 January 2026, supported by current data from 24 January 2026, reflects a balanced view of the company’s prospects. Investors are advised to maintain their positions and watch for further developments in financial performance and market trends. The stock’s attractive valuation and quality fundamentals offer potential upside, but the flat financial trend and mild technical caution warrant a prudent stance.
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