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Apollo quadruples in 15 months: Has story played out yet?

Ambareesh Baliga, independent market expert says investors should book out of the stock now. His rationale: raw material prices have come down, but tyre prices haven’t. There is always a lag in commodity price transmission and hence tyre prices are likely to fall hereon.

Tyre major  Apollo Tyres has quadrupled in the past 15 months. Has the story in the company played out or is there more steam left? Experts have carrying views.

Ambareesh Baliga, independent market expert says investors should book out of the stock now. His rationale: raw material prices have come down, but tyre prices haven’t. There is always a lag in commodity price transmission and hence tyre prices are likely to fall hereon.

Also read: FIIs can buy up to 45% stake in Apollo Tyres: RBI

However, the story need not necessarily be so negative believes Devang Mehta, senior vice president & Head- equity advisory, Anand Rathi Financial, who advices to have a strong hold on the stock.

“We had conducted a series of channel checks on this stock with Apollo Tyre dealers. The company has seen robust demand and sales. The company’s replacement demand and original equipment manufacturer (OEM) too have been strong. Vehicle sales have picked up and the festive season has only just begun,” adds Mehta.

Transcript to follow soon.

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