Apar Industries Ltd. share price target

Strong Revenue Growth but Margins Impacted: Apar's revenues have shown a growth of 41% with strong growth across segments. The conductors segment grew the most at 65% and is currently having the highest order book of Rs.32260 Mn.

Refer to important disclosures at the end of this report Strong volume show offset by volatile raw material prices; TP reduced Apar Industries' (Apar) Q3FY19 earnings were below our estimates. While revenues rose 41.4% yoy to Rs21.2bn, PAT declined 12.2% yoy to Rs347.2mn due to increase in raw material prices, interest costs, stiff competition and INR depreciation. Its Conductors segment clocked strong revenue growth of 64.8% yoy to Rs10.5bn, driven by a 45.3% yoy surge in realizations and 13.4% rise in volumes. Apar's Cables and...

Dominant player across business lines at global scale Apar is 3rd largest manufacturer of Conductors and 4th largest manufacturer of transformer oil in the world. In conductors business, its market share stands at 23% in domestic market with installed capacities of 1.8lac MT. It is the largest manufacturer and exporter of conductors from India. In case of specialty oils, its market share stood at 45% with 5.4lac KL installed capacity (including 1lac KL capacity overseas at Sharjah). In FY'18,...

Dominant player across business lines at global scale Apar is 3rd largest manufacturer of Conductors and 4th largest manufacturer of transformer oil in the world. In conductors business, its market share stands at 23% in domestic market with installed capacities of 1.8lac MT. It is the largest manufacturer and exporter of conductors from India. In case of specialty oils, its market share stood at 45% with 5.4lac KL installed capacity (including 1lac KL capacity overseas at Sharjah). In FY'18,...

Margins to Recover in H2FY19: Apar revenue grew 51.0% YoY with a strong base of volumes and growth acrossthe segments. The conductors segment ends the quarter with the highest everorder book, revenue growth and realization growth of 81%/34% respectively.

Higher Interest Cost Led Down the Performance: Apar's results came in line with estimates by growing 5.0% YoY. The growth was across segment with cables segment taking the lead and growing by 17.7% YoY.

Higher Commodity Prices Impact Bottom-line, New Initiativesto be in Focus: Apar's revenue grew by 24.5% YoY driven by a strong growth across segments.Conductors (40.5%), Oils and Lubricants (30.1%) and Cables (4.7%).

Valuation: We initiated this company on 1st Jan. 2018 at Rs. 810.6, with a target price of Rs. 1,124.9 per share. Anticipating good growth across all the segments and improvement in the profitability, we reiterate our BUY rating on the stock. Key concern would be the continued profitability pressure on the...

Apar's revenue came in line with expectations but margins were impacted due to poor performance from conductors segment. The conductor's margin impacted due to aggressive bidding in domestic market, lower base of High Efficiency Conductors orders and substantial rise in raw material prices.

Market leader in conductors, transformer oil. Would be the key beneficiary from the growth in the power T&D; space. Governments focus on the high capacity transmission line would be positive...