Epic Research

Friday, July 12, 2013

Epic Update : Apollo Tyres


Apollo TyresNo question of rethinking on Cooper Tire deal
‘Did our homework well before announcing Cooper Tire deal’
Raised debt limit last year for expansion plans
Alert: Company had raised debt limit to USD 830 million from USD 530 million in April 2012
Expect commodity price to moderate going forward
Expect significant increase in rubber supply over next few years
Additional supply of rubber will keep prices soft
Rubber prices in Southeast Asia remain at record lows
Alert: Analysts feel any hike in rubber costs to hurt company margin
Leverage taken for acquisition split across entities
These entities have cash flows to service the debt. 


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