Feb 4 (Reuters) - India's Apollo Tyres reported a 39.5% rise in quarterly profit, as tax cuts spurred demand both from automakers as well as buyers looking to replace older tyres.

The company's net profit rose to 4.71 billion rupees ($52.1 million) for the quarter ended December 31, compared with 3.37 billion rupees a year earlier.

Revenue from operations rose 11.8% to 77.43 billion rupees, while total expenses grew 8.9%.

For further earnings highlights, click (nFWN3Z013M)

KEY CONTEXT

New vehicle sales remain a key driver of revenue for tyre makers like Apollo Tyres, which supply to automakers such as Maruti Suzuki India, Mahindra & Mahindra and TVS Motor Company.

Indian auto sales got a boost from the government's sweeping September tax cuts. Tax on most tyres was also reduced to 18% from 28%.

Analysts say that Apollo's revenue growth was led by a pickup in replacement and new vehicle demand.

Peer CEAT reported a jump in its third-quarter profit last month, while MRF has yet to report its results.

PEER COMPARISON

Valuation (next Estimates (next 12 Analysts' sentiment

12 months) months)

RIC PE EV/EBITD Revenue Profit Mean # of Stock to Div

A growth (%) growth (%) rating* analysts price yield

target** (%)

Apollo Tyres Ltd APLO.NS 16.34 7.34 7.17 31.13 BUY 23 0.86 1.04

CEAT Ltd CEAT.NS 17.46 7.73 13.52 28.92 BUY 14 0.88 0.80

JK Tyre & Industries Ltd JKIN.NS 15.12 8.82 7.97 23.11 HOLD 5 1.08 0.57

MRF Ltd MRF.NS 22.17 10.73 8.55 20.92 SELL 4 0.92 0.18

* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

OCTOBER-DECEMBER STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 90.4100 Indian rupees

(Reporting by Meenakshi Maidas and Anuran Sadhu in Bengaluru; Editing by Mrigank Dhaniwala)