X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
MRF v/s Apollo Tyres: A comparison - I - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 12, 2012

    MRF v/s Apollo Tyres: A comparison - I

    In line with the auto industry, the tyre industry in India has also shown good growth over the past few years. In fact, since tyres wear out every few years, growth prospects for the entire industry holds even greater promise than the industry it is so heavily reliant on. In FY11, the Indian tyre industry is believed to have clocked a turnover in the region of Rs 350 bn with volumes increasing as much as 30% in the passenger vehicle category. The growth story is far from over though. With auto penetration in India lower than even some developing nations, growth prospects are only likely to improve from here on. In view of this, we make an attempt to compare Apollo Tyres and MRF, two of the biggest tyre manufacturers in India and make an attempt to find out which of these looks a better bet from a long term perspective.

    Background

    Apollo Tyres current produces the entire range of automotive tyres for ultra and high speed passenger cars, truck and bus, farm, Off-The-Road, industrial and specialty applications like mining, retreaded tyres and retreading material. These are produced across Apollo's nine manufacturing locations in India, Netherlands and Southern Africa. For the first time, in 2006 Apollo ventured outside India in its quest to test itself outside its home comforts. Apollo acquired Dunlop Tyres International Pty Ltd in South Africa (since renamed as Apollo Tyres South Africa Pty Ltd) and Zimbabwe, taking on southern Africa as the second domestic market. The company holds brand rights for the Dunlop brand across 30 African countries. In 2009, Apollo acquired Vredestein Banden BV in the Netherlands, and thereby adding Europe as its third crucial tyre market.

    On the other hand, synonymous with its corporate mascot of a muscleman, MRF is the first tyre company in India to reach a turnover of Rs 50 bn. In fact, its gross revenues crossed the Rs 100 bn mark in FY11. The company manufactures the largest range of tyres in India and is the market leader with the largest market share in almost every segment of the tyre industry. Since 1984, MRF Tyres has consistently been chosen as OEM fitment by almost every major automobile companies in India. Apart from tyres MRF also manufactures conveyor belts, pretreads and advanced polyurethane paints.

    Operational performance

    Let us move on to the operational performance of the two companies in the last five years. As far as revenue and profit growth is concerned, there is very little to choose we believe. While Apollo Tyres has managed to improve its consolidated topline and bottomline by 26% and 37% average annual growth (CAGR) between FY06 and FY11, the same numbers for MRF have come in at 20% and 34% respectively. However, it should be noted that a good part of growth for Apollo Tyres has come on account of the acquisitions it has made in recent years. In other words, its growth also has some inorganic component to it. The growth for MRF on the other hand has been all organic. Also important to add that both the companies managed to improve their net profit margins during the period. While Apollo Tyres' margins improved from 3% in FY06 to 4.7% in FY11, MRF's 3.2% margins in FY11 were a significant improvement from 1.9% that it recorded in FY06.

    In the next article in the series, we will consider the capital efficiency of the two companies.

     

     

    Equitymaster requests your view! Post a comment on "MRF v/s Apollo Tyres: A comparison - I". Click here!

    4 Responses to "MRF v/s Apollo Tyres: A comparison - I"

    Rohit kumar

    May 8, 2017

    plz send me the comarison chart mrf vs appolo

    Like 

    Chandrakant

    Mar 17, 2017

    Need comparison between two companies

    Like 

    Saravanan

    Jul 22, 2016

    I want comparision

    Like (1)

    syrinivas

    Jul 12, 2013

    mrf vs apollo sale share

    Like (17)
      
    Equitymaster requests your view! Post a comment on "MRF v/s Apollo Tyres: A comparison - I". Click here!
     

    More Views on News

    Atul Auto: Demonetization Impacts Volumes and Profitability (Quarterly Results Update - Detailed)

    Mar 1, 2017

    Atul Auto has reported a 11.2% YoY decline in the topline while the bottomline has declined by 23% YoY.

    Bharat Forge Ltd: Subdued Performance, Recovery on Cards? (Quarterly Results Update - Detailed)

    Nov 22, 2016

    Bharat Forge has announced its financial results for the second quarter of the financial year 2016-17 (2QFY17). During the quarter, revenues declined by 20.1% YoY and net profits declined by 26.3%.

    Exide Industries: Good show amid the broad based recovery! (Quarterly Results Update - Detailed)

    Oct 28, 2016

    Good show amid the broad based recovery

    Endurance Technologies Ltd (IPO)

    Oct 4, 2016

    Equitymaster analyses Initial Public Offering (IPO) of Endurance Technologies Limited

    GNA Axles Limited (IPO)

    Sep 14, 2016

    Should you subscribe to GNA Axle IPO?

    More Views on News

    Most Popular

    Post Demonetisation Real Estate Sales Have Collapsed, But Prices Haven't(Vivek Kaul's Diary)

    Jul 11, 2017

    While sales have fallen dramatically, net net home prices continue to hold on.

    Ride the Bull Wave with These Perfect Proxies to India's Growth Story(The 5 Minute Wrapup)

    Jul 15, 2017

    The secret of spotting multibaggers before they become a hit.

    The New Pharma Rally Starts NOW(Daily Profit Hunter)

    Jul 12, 2017

    The most hated sector is offering the best trading opportunity. Are you ready?

    All You Need To Know To e-File Your Income Tax Returns(Outside View)

    Jul 12, 2017

    The Income Tax return filing deadline is drawing near; if you have not already filed your taxes, here's how to do it.

    The Impact of GST On Banking transactions, Insurance, and Investments(Outside View)

    Jul 11, 2017

    PersonalFN explains how GST impacts your insurance premiums, investments, and banking transactions.

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS