Apollo Tyres Limited, India’s leading tire manufacturer, had almost doubled its revenue from 2007 to 2010 which show the growth potential of the company but on the other hand its share price did not achieve any significant growth in the last two years, providing only 12 percent return between 2010 and 2012.
An investor in India, in 2012, sat at home determining the investing opportunities in this low return scenario. However, the company in the past decade had significantly embraced the growth opportunities through strategic acquisition and organic investment, and simultaneously diversifying its product and geographic mix.
The investor used the technique of free cash flow discounting valuations to determine this dramatic growth but the undervalued stock. The author, Varun Dawar is affiliated with Institute of Management Technology, Ghaziabad.
Related Case Solutions & Analyses:
The Midnight Journal Entry
Speeding Ahead to a Better Place
How to Save Your Brand In the Face of Crisis
Can Product Returns Make You Money
Emergence of an International Accounting Standards Setter
MiniScribe Corporation
Brand Leverage Power: The Critical Role of Brand Balance
LIFO or FIFO That Is the Question
Sum of the Parts Valuation: Digital Realty Trust
Toward Golden Pond (A)
