APL Apollo Tubes Ltd. share price forecast

APL Apollo: APL Apollo Tubes' (APL) Q4 revenue increased 63% YoY/31% QoQ to INR42.1bn, led by strong volume growth (+26.7% YoY) and higher realisation (+28.5% YoY). Value-added products contributed to 63% of overall volume in Q4, vs 57% YoY, led by strong growth across Apollo Z rust proof (+47% YoY) and Apollo proof sheet segment (+242% YoY). EBITDA/ton, however, increased marginally by 1.7% YoY to INR4,823, vs INR4,742 YoY. Strong volume and improved realisation led to a 29% YoY rise in EBITDA to INR2.7bn, with margin contracting 167 bps YoY to 6.3% due to higher sale of general structures. PAT increased by 37% YoY to INR1,630mn, which was further supported by a fall in interest expenses. Given (1) the Raipur plant is beginning operation on high-value product, (2) increased mix of value-added products (75% in FY25), and (3) enhanced government infrastructure spending, we expect volume and EBITDA/ton to improve, going ahead. We revise our estimates by 11%/7% for FY23E/24E and revise our TP to INR1,142 (34xFY24 EPS), from INR1,113 earlier; retain BUY. CESC: CESC's consolidated PAT in Q4FY22 increased marginally by 3.7% YoY to INR4.5bn, as higher earnings in the Noida circle (from higher power demand) were offset by increased losses in the distribution franchisee (DF) business (a loss of INR270mn vs a profit of INR270mn YoY), given penalty waiver in Malegaon circle. Dhariwal profitability was lower due to a higher YoY base (from one-offs recovered in Q4FY21), while standalone PAT declined marginally by 4.1% YoY. The Dhariwal project has signed a three-year medium-term PPA for...

We retain a BUY rating on the stock with a TP of Rs 1,100/share (from Rs 1,215/share) and continue to value it at 30x PE of FY24E EPS.

They have no plans to raise funds as internal cash flow generation is strong and are planning to become debt free. Their focus is on innovating new shapes and sizes. Management continues to remain confident of maintaining revenue growth...

We retain a BUY rating on the stock with a TP of Rs 1,215/share and continue to value it at 30x PE of FY24E EPS

We visited APL Apollo Tubes’ (APL) Murbad, Maharashtra facility and met with multiple APL distributors. Murbad was Lloyds steel plant, which APL acquired in CY10 for a cash consideration of Rs400mn with a capacity of 90,000te. The same has been ramped up to 0.35mtpa over past seven years, with the introduction of direct forming technology (DFT) and cold rolling and Galva (GP/GI) capacity.

APL Apollo Tubes Q2FY22 EBITDA was slightly weaker than our forecast. EBITDA stood at Rs2,222 mn (9% below our forecast). EBITDA/t expanded by 48% YoY to Rs5,199, although sequentially it fell 24%. Nevertheless, EBITDA/t over Rs5,000 is likely to be sustainable over the coming one year in our view; APL aims to increase EBITDA/t to Rs6-7,000/tonne in coming 2-3 years as it expands its Raipur facility where it will have 0.5 mtpa of high-margin products. Also, APL targets strong volume growth of 2.5 mn...

We analyzed the shifting trends in the Structural Tube industry, driven by growing consumption of steel tubes in Construction projects, coupled with growing acceptance and increasing applications of steel tubes. Key drivers of APAT's performance include: a) growing usage of structural tubes as a replacement to RCC, b) first-mover advantage by installing DFT in India, and c) leadership position to help benefit from this shift....

We expect it continue to trade at such premium multiple and initiate coverage on APL with a BUY rating at a TP of INR2,226/share (35x FY24E EPS). APL Apollo Tubes (APL) is Indias leading structural steel tube manufacturer with a capacity of 2.6 million tonne per annum (mtpa) and a pan-India presence. APLs market share enhanced from 27% in FY16 to 50% in FY21, led by a strong distribution network, branding, offering of customized & innovative products and capacity enhancement. APLs strategy to focus on rural areas and tier 2/3 cities paid off well during the reverse migration last year. With 24% CAGR in both revenue and PAT over FY11-21, it has emerged as one of the pioneers in the segment, much ahead of competitors. Going ahead, we expect APL to post revenue/PAT CAGRs of 20%/34% over FY21-24E, led by an increased mix of value-added products (75% in FY25 vs 57% in FY21), capacity expansion, improved margins, and enhanced government spending on infra. APLs valuation has sharply rerated on market share gains, debt reduction, robust growth visibility, and margin expansion. It is trading close to the average multiple of building material stocks as 75% of its product mix caters to this segment.

We recommend a BUY with TP of Rs. 1,780/share.

We retain a BUY rating on the stock and value it at 30x PE of FY24E EPS, to arrive at a revised TP of Rs 1,920 (Rs 1,595 earlier).

APL Apollo Tubes (APL) reported strong improvement in profitability for Q1FY22; its EBITDA was a strong beat to our forecast. APL's EBIDTA/tonne jumped to Rs6,825 (+129% YoY, +44% QoQ) driven by 1) strong demand, 2) better product mix and 3) higher contribution from high-margin Apollo Tricoat Products. Despite 14% QoQ fall in...

We retain a BUY rating on the stock and value the stock at 30x PE of FY23E EPS, to arrive at a revised TP of Rs 1,595 (Rs 1,054 earlier).

APL Apollo Tubes (APL) reported better than expected profitability for Q4FY21 as its EBITDA was 19% higher than our estimate. EBIDTA/tonne at Rs4,742 (+59% YoY) was a strong beat and was led by better product mix and scarcity of raw material (steel)/...

Apollo Tricoat's minority shareholders will receive for each equity share held: o One equity share in APL Apollo o Implied premium of 16% on Friday's i.e., 26th Feb,2021 closing price for Apollo Tricoat's shareholders...

Maintain BUY and revise TP to Rs. 1,054/share (Rs. 713 earlier) as we now value the stock on PE basis from EV/EBITDA earlier owing to significant reduction in debt and overall improvement in balance sheet.

APL Apollo Tubes (APL) reported better than expected profitability for Q3FY21 as its EBITDA was 27% higher than our estimate. The EBIDTA/tonne at Rs4,780 (+43% YoY) was a strong beat and was led by better product mix and scarcity of raw material (steel)/ tubes. APL's EBIDTA jumped 45% YoY to Rs2.3 bn. Higher operating cash flow for 9MFY21 at Rs 8.5bn (Rs5.1 bn in FY20) and fall in net working capital days to 8 days...