5. Interest Cost declined by 41% to `159mn 2. Given the strong commentary in Q1 about volume growth, the street was optimistic going into Q2 earnings. This optimism led rally was accentuated with strong volume growth of ~32% in Q2FY21 released by the company in pre-quarterly update. 3. The second quarter delivered robust performance with healthy traction in revenue (34% YoY) led by superior volume growth, sharp improvement in EBITDA per ton and...
We revise our Revenue/EBITDA/PAT estimates for FY21/22 on the back of a healthy growth commentary and likely improvement in margins supported by market share gains. Maintain BUY with a revised TP of Rs. 3,565/share as we raise our target EV/EBITDA multiple to 12x (10x earlier)
3. We recommend investors to ADD on dips as the company has a strong balance sheet and leading position in the industry which allows it to positioned well to capitalize on these opportunities. 3. Net Working Capital (NWC) cycle stood at 10 days in Q1FY21 vs. 20 days in FY20....
Post results we have revised FY21E revenues upwards by 3.7% but FY22E downwards by 5.8% (lower volume assumptions). PAT for FY21E stands doubled and up by 28.3% for FY22E due to beat on EBITDA/ton & lower interest burn. Going ahead, along with volume growth we also expect EBITDA/ton to expand steadily led by operating leverage, cost savings and better product mix. Simultaneously balance sheet will also gain strength due to combined effect of shorter NWC cycle (10 days v/s 17 days FY20), deleveraging and high cash generation. At CMP, the stock is trading at EV/EBITDA of 8.1x FY22E. Our previous TP of Rs 1961 is achieved but we...
Post results we have revised FY21E revenues upwards by 3.7% but FY22E downwards by 5.8% (lower volume assumptions). PAT for FY21E stands doubled and up by 28.3% for FY22E due to beat on EBITDA/ton & lower interest burn. Going ahead, along with volume growth we also expect EBITDA/ton to expand steadily led by operating leverage, cost savings and better product mix. Simultaneously balance sheet will also gain strength due to combined effect of shorter NWC cycle (10 days v/s 17 days FY20), deleveraging and high cash generation. At CMP, the stock is trading at EV/EBITDA of 8.1x FY22E. Our previous TP of Rs 1961 is achieved but we...
APL Apollo Tubes Ltd (APTL) is the largest producer of Electric Resistance Welded (ERW) Steel Pipes in India, with a capacity to produce 2.5 Million Tonnes per annum. Steel Pipes has its applications across varied sectors and industries like Infrastructure Projects, Construction activities, Automobiles,...
alongside growth could result in possible rerating APL Apollo Tubes (APAT) reported good Q4FY20 results amidst tough times. Cons revenue de-grew 9.8% YoY to Rs 18,885m on back of 4.1% volume de-growth to 401,000 MT. While sales in metros have taken a back seat, Tier 2&3 cities are showing strong traction and now account for 75% of revenues (40% last year). EBITDA/ton declined 9.9% YoY to Rs 2,989 due to lower fixed cost absorption. PAT declined 1.5% YoY to Rs 608m. FY20 Revenue/EBITDA/PBT grew 8%/21.5%/30.6% to Rs77.2bn/4.8bn/2.9bn respectively. Volumes grew by 22.7% to 16,43,099 MT...
alongside growth could result in possible rerating APL Apollo Tubes (APAT) reported good Q4FY20 results amidst tough times. Cons revenue de-grew 9.8% YoY to Rs 18,885m on back of 4.1% volume de-growth to 401,000 MT. While sales in metros have taken a back seat, Tier 2&3 cities are showing strong traction and now account for 75% of revenues (40% last year). EBITDA/ton declined 9.9% YoY to Rs 2,989 due to lower fixed cost absorption. PAT declined 1.5% YoY to Rs 608m. FY20 Revenue/EBITDA/PBT grew 8%/21.5%/30.6% to Rs77.2bn/4.8bn/2.9bn respectively. Volumes grew by 22.7% to 16,43,099 MT...
APL Apollo Tubes (APL) Q4FY20 operating results were broadly in line with our estimates. Net sales decreased 10.6% YoY to Rs.18,087 mn led by lower volumes (-4.4% YoY to 401 kt) and lower steel prices. EBITDA fell 13.6% YoY to Rs. 1,199 mn. EBITDA/tonne fell 9.9% YoY to Rs2,989 due to lower volumes. Net profit fell 7.9% YoY...
The outbreak of COVID-19 globally has affected the supply chains of most companies beginning late March. We expect most of the companies under our coverage in mid-cap space to report fall in sales on a YoY basis during Q4FY20 due to the weak environment and lockout in the month of March. Lower sales are also likely to impact margins due to negative operating leverage. Some companies including battery manufacturers, Castrol are expected to post strong margin contraction. However, the serious impact on sales and profitability is likely to be felt during Q1FY21 when the impact of lockdown will be very prominent....
APAT reported volume growth of 53%/32% YoY/QoQ on consolidated basis for Q3FY20 at 4.8lakh ton. Robust volume performance was aided by Apollo Tricoat (71% QoQ rise in volumes @ 47kt) alongside APAT's core products.
Sales volumes stood at 480,225 MT up 52.6% YoY and 31.9% QoQ. Volumes increased on account of production efficiency, foray into new locations, increased branding expenditure, re-stocking at dealer end and improvement in demand scenario. The company is on track to surpass its volume guidance of 20+% growth. EBITDA/ton stood at Rs 3,342 up 77.6% YoY and 69% QoQ on account of improved...
APL Apollo Tubes (APL) results were broadly in line with our expectations. Net sales increased 25.8% YoY to Rs20 bn mainly led by strong volume growth (+52.6% YoY to 0.5 mn tonnes) partially offset by lower realization (-17.5% YoY to Rs42,489/tonne) due to lower steel prices. EBITDA jumped 171% YoY to Rs1.6 bn as EBITDA/ tonne improved 77.6% YoY to Rs3,342. Net profit jumped nearly 4.7x YoY to Rs742 mn. The company...
APAT reported volume growth of 20% YoY on consolidated basis for Q2FY20 at 3.6lakh ton. We note, this a modest volume performance in a lean quarter (weak construction activity) aided by Hollow Sections (17% YoY growth)_ and contribution from Apollo Tricoat.
APL Apollo Tubes (APL) reported better than expected profitability for Q2FY20. Although EBITDA/tonne fell to Rs1,977 (-30.3% YoY, -38.5% QoQ), it was better than our forecast of Rs1,800. EBITDA fell 42.4% QoQ to Rs720 mn due to inventory loss as steel prices fell sharply (Rs5,000/tonne) during the quarter. There was a tax reversal of Rs341 mn vs. our estimate of Rs3 mn. Hence, net profit at Rs598 mn was significantly above our forecast. Cash flow from operations improved to Rs3 bn in H1FY20 compared...
APL Apollo Tubes (APAT) is the largest producer of Electric Resistance Welded (ERW) Steel Pipes and Sections in India with a manufacturing capacity of 2.55 mn MTPA. With pan India manufacturing capacities and extensive distribution network, they are able to cater to customers effectively and efficiently (95% of the revenues come from the dealer-distributor network). APAT has always been a pioneer in new technologies & innovative products which has helped it grow faster than its peers. They also invest continuously in enhancing brand awareness and develop the brand which in turn is creating entry barriers for new entrants....
APL Apollo Tubes (APAT) is the largest producer of Electric Resistance Welded (ERW) Steel Pipes and Sections in India with a manufacturing capacity of 2.55 mn MTPA. With pan India manufacturing capacities and extensive distribution network, they are able to cater to customers effectively and efficiently (95% of the revenues come from the dealer-distributor network). APAT has always been a pioneer in new technologies & innovative products which has helped it grow faster than its peers. They also invest continuously in enhancing brand awareness and develop the brand which in turn is creating entry barriers for new entrants....
We initiate coverage on APL Apollo Tubes (APL) with a BUY rating and a target price of Rs1,920. APL is India's largest manufacturer of Electric Resistance Welded (ERW) pipes. It is also one of the lowest cost producers of ERW pipes with wide range of products and a large distribution network. In the past decade, APL has outperformed industry growth by gaining market share from small and unorganized players. These factors have resulted in strong return ratios for APL (Average ROE of 19% over FY10-19). With expanded capacity in place, we expect its volumes to grow at a CAGR of 20% over FY19-21E. Also, its EBITDA/net profit are expected to grow at CAGR of 24%/45% over...
