Why is Apollo Tyres’ Share Price Falling?

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Apollo Tyres has been on a downward trajectory over the past week, with its stock price declining by 3.97%, significantly underperforming the Sensex benchmark, which fell by only 0.78% during the same period. This trend has continued over the last month, with the stock dropping by 4.03% compared to a marginal 0.23% decline in the Sensex. Year-to-date, the stock has recorded a negative return of 1.50%, in sharp contrast to the Sensex’s robust gain of 8.12%. Over the last year, Apollo Tyres’ shares have fallen by 6.76%, while the Sensex has appreciated by 5.36%. Despite this recent weakness, the stock has delivered strong long-term returns, rising 53.2% over three years and an impressive 158.55% over five years, outperforming the benchmark’s respective gains of 37.73% and 79.90%. 

Key Reasons Behind the Apollo Tyres Share Price Fall

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There are several reasons behind the Apollo Tyres Share Price Fall, including changes in Government Policies, supply & demand dynamics, Market Fluctuations, Low Cash Flow from Operating Activities, pledging new shares, and weak promoter commitment.  

• Changes in Government Policies: Changes in government policies may influence Apollo Tyres and lead to a decline in its share price, as the Indian government’s increased focus on domestic production fuels demand for its specialised electronic and electro-mechanical systems. 
• Supply & Demand: Basic market dynamics in which more buyers than sellers drive prices up. External risks and high valuation relative to peers can temper appreciation despite good results. Record ROCE and PBDIT figures highlight significant operational efficiency. 
• Market Fluctuations: Changes in market conditions may influence the Apollo Tyres share price because many factors affect its share price; any downturn in market conditions may lead to a fall in the Apollo Tyres share price.  
• Low Cash from Operating Activities: Over the last 10 years (FY2016-FY2025), the company reported a cumulative net profit after tax (cPAT) of ₹221 crores. However, during this period, it reported a negative cumulative cash flow from operations (cCFO) of ₹83. 
• Pledging New Shares: When promoters pledge their existing shares to raise funds for subscribing to new equity, their increased stake does not reflect additional personal capital at risk. Economically, the value of their ownership has already been monetised through borrowing, which has led to a fall in the Apollo Tyres share price. 
• Negative free cash flow and debt raising: Cash flow-related problems of Apollo Tyres, which do not end with its working capital position. The company had to incur significant capital expenditures to create additional manufacturing capacity, leading to a deeply negative free cash flow (FCF) that required even more capital. 

Note: For the live Apollo Tyres Share Price Target, visit the univest app and check the stock fundamentals.  

Apollo Tyres: Future Outlook

While Apollo Tyres’ stock has declined recently, its strong long-term growth trajectory and solid balance sheet fundamentals suggest the company remains well-positioned for recovery. Investors should weigh the current profit pressures against the company’s ability to generate consistent sales growth and maintain operational efficiency. The stock’s discount valuation relative to peers may offer an attractive entry point for long-term investors. Apollo Tyres is forecast to grow earnings and revenue by 33.5% and 6.7% per annum, respectively. EPS is expected to grow by 32.5% per annum. Return on equity is forecast to be 13.2% in 3 years. 

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Apollo Tyres: Performance Analysis

Apollo Tyres recent price decline is partly attributable to a significant contraction in profitability. Over the past year, the company’s profits have fallen by 25.8%, which has weighed heavily on investor sentiment despite the stock’s attractive valuation metrics. The company maintains a strong ability to service its debt, with a low Debt-to-EBITDA ratio of 1.40 times, which mitigates financial risk. Additionally, Apollo Tyres has demonstrated healthy long-term growth, with net sales increasing at an annual rate of 13.02% and operating profit margins at 25.12%. Its return on capital employed (ROCE) stands at a respectable 10.23%, and the enterprise value to capital employed ratio of 1.8 indicates the stock is trading at a discount relative to its peers’ historical valuations.  

Apollo Tyres: Share Price Target

Apollo Tyres share price target of ₹584.60, and the consensus estimate represents an upside of 17.21% from the last price of ₹498.75. View 13 reports from 5 analysts offering long-term price targets for Apollo Tyres Ltd. Based on 24 analysts, 66.667% of analysts recommend a ‘BUY’ rating for Apollo Tyres, with an average target price of ₹562.83. According to Wall Street analysts, the average 1-year share price target for Apollo Tyre share price is ₹570.58, with a low forecast of ₹442.38, and a high forecast of ₹682.5. However, the reported profit after tax fell 13.2% year on year to ₹258 crores, owing to a ₹180 crores loss, while adjusted EPS rose from ₹4.8 to ₹6.9. 

As per technical data, the minimum share price target for Apollo Tyre is ₹620.15, and the maximum share price it can reach is ₹853.12.  

Summary of Apollo Tyres Share Price Forecast for 2026

• The initial price target for Apollo Tyres Ltd in 2026 is ₹620.15.
• With favourable market conditions, the mid-year price target for Apollo Tyres could reach ₹717.31.
• By the end of 2026, the price target for Apollo Tyres is expected to potentially reach ₹853.12, considering bullish market trends. 

 Note: For the live Apollo Tyres Share Price Target, visit the univest app and check the stock fundamentals.  

Apollo Tyres: Future Predictions by Analysts 

According to some analysts and statistical models, if current market and earnings trends persist, the projected average share price by mid-year could be around ₹620.80. In contrast, the average share price by year-end could reach approximately ₹560.70. These figures are indicative and may change with changes in interest rates, product sales, or broader equity-market sentiment. Apollo Tyres is forecast to grow earnings and revenue by 5% and 7%, respectively, per annum. EPS is expected to grow at a rate of 0.03% per annum. Return on equity is forecast at 0.45% over the next 3 years. 

Apollo Tyres: Analysts’ Rating

• The average 12-month price target is ₹690, and the consensus rating is Hold (mix of Buy, Hold, & Sell). 
• The analyst’s target range is between ₹520.80 and ₹690.12. 
• According to some analysts, concerns remain about a ‘Reduce’ call at ₹650.00. 
• The analyst’s sentiment is mixed; there have been recent bullish calls (ICICI, JM), but also cautious ones (Motilal Oswal, Nuvama). 

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What is the Right Time to Buy Apollo Tyres?

According to analysts, Apollo Tyres’s share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all relevant factors before investing in Apollo Tyres. There are some factors to consider before investing in Apollo Tyres Company shares.

• Strong Fundamentals: Investors should review Apollo Tyres Company’s fundamentals before investing. If a company has strong fundamentals, high profitability, and effective management, then investors should consider investing in it.    
• Financing Partnerships: Financing partnerships bridge the gap between customers and financial institutions, facilitating the distribution of a wide range of products and generating positive sales revenue for many consumers.   
• Growth in the Technical Sector: The company is well-positioned in the electronic demat sector to deliver benefits to Apollo Tyres. This dominant sector increases demand and prices for Apollo Tyres.
• Highly Volatile: Prices are highly volatile, leading to significant price changes that substantially affect Apollo Tyres Company’s stock price. Investors must review the market structure before investing in shares of Apollo Tyres Company.

Conclusion

To summarise, we have presented the share price target, key reasons behind the fall in the Apollo tyres share price, and also have discussed the future predictions of the analysts about the Apollo tyres shares, so that the investors may make the optimising decisions about the apollo tyres share price, so it is essential to note that while these price targets are based on technical analysis, other market conditions and news, which could also impact the stock’s performance of the company. Therefore, these hypothetical targets should be used as guidelines rather than financial advice. Always perform your own due diligence before making any investment.

FAQs

What are the key reasons behind the Apollo Tyres share price fall?

Ans.  There are several reasons behind the Apollo Tyres Share Price Fall, including changes in Government Policies, supply & demand dynamics, Market Fluctuations, Low Cash Flow from Operating Activities, pledging new shares, and weak promoter commitment.  Changes in government policies may influence Apollo Tyres and lead to a decline in its share price, as the Indian government’s increased focus on domestic production fuels demand for its specialised electronic and electro-mechanical systems. 

What is the Apollo Tyres share price target?

Ans.  Apollo Tyres share price target of ₹584.60, and the consensus estimate represents an upside of 17.21% from the last price of ₹498.75. View 13 reports from 5 analysts offering long-term price targets for Apollo Tyres Ltd. Based on 24 analysts, 66.667% of analysts recommend a ‘BUY’ rating for Apollo Tyres, with an average target price of ₹562.83. 

What are the future predictions of the analysts regarding Apollo Tyres?

Ans. According to some analysts and statistical models, if current market and earnings trends persist, the projected average share price by mid-year could be around ₹620.80. In contrast, the average share price by year-end could reach approximately ₹560.70. These figures are indicative and may change with changes in interest rates, product sales, or broader equity-market sentiment.  According to Wall Street analysts, the average 1-year share price target for Apollo Tyre share price is ₹570.58, with a low forecast of ₹442.38, and a high forecast of ₹682.5.

What are the factors that affect the Apollo Tyres share price?

Ans.  According to analysts, Apollo Tyres’s share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all relevant factors before investing in Apollo Tyres. There are some factors to consider before investing in Apollo Tyres Company shares. Financing partnerships bridge the gap between customers and financial institutions, facilitating the distribution of a wide range of products and generating positive sales revenue for many consumers.  

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