Case Name :      Apollo Tyres: Investment Decision Dilemma

Authors :           Varun Dawar, Rakesh Arrawatia

Source :             Ivey Publishing

Case ID :            W14561

Discipline :        Finance

Case Length :    12 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In early March 2012, an investor sat at home in Gurgaon, India examining the latest financial information about Apollo Tyres Limited, India’s leading tire manufacturer. Over the past decade, the company had significantly diversified its product and geographic mix through organic investment and strategic acquisitions and had experienced superior growth opportunities. Yet, after almost doubling between 2007 and 2010, its share price had not seen any significant appreciation in the last two years, delivering only 12 per cent return between 2010 and 2012. Would this be a good investment? He decided to use the free cash flow discounting valuation technique to identify and value this high growth but undervalued stock.