BoA-ML raises target price of Apollo Tyres; stock surges 5%

Shares of Apollo Tyres jumped 4.9 percent to Rs 98.20 after Bank of America-Merrill Lynch raised its target price to Rs 135 from Rs 115 , and maintained “buy” rating on the stock, in a report.

BoA-ML said that it expects Apollo’s EBITDA margins to sustain improvement through fiscal 2014 driven by better sales mix and improved utilisation in the city of Chennai.

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The investment bank also expected “pricing discipline” at Apollo, and added that “strong” cash generation and “sharp moderation” in capex will lower debt levels.

Reuters