APL Apollo Tubes Ltd. share price target

We maintain our BUY rating on the stock.

APL Apollo Tubes (APAT) reported the fourth consecutive quarter of weak operating performance (EBITDA/MT down 62% YoY in 2Q) on account of inventory loss of ~INR1.5b.

We maintain a Buy on the stock with an unchanged PT of Rs. 1850, considering its strong outlook led by capacity additions and structural demand drivers.

We maintain our BUY rating on the stock.

APL Apollo Tubes (APAT) reported healthy sales volume of 721kmt (up 9% YoY/6% QoQ) in 1QFY25, led by the ramp-up of its Raipur and Dubai plants.

APL Apollo Tubes (APL) reported largely in-line consolidated revenues at Rs. 4974 crore (up 9.4% y-o-y) led by 9% y-o-y growth in sales volumes. However, consolidated EBITDA/tonne at Rs. 4183 (down 9.9% y-o-y.

APL Apollo Tube’s (APL) Q4FY24 EBITDA has missed our and consensus estimates by 11.5% and 10.3%, respectively.

We maintain our BUY rating.

APL Apollo Tubes (APAT) reported muted sales volume of 679KMT (up 4%
YoY and 12% QoQ) in 4QFY24, led by channel de-stocking due to steel
price corrections. Further, EBITDA/MT declined ~17% YoY to ~INR4,132,
due to higher rebates and discounts offered by APAT to counter the
inventory destocking.

Recommendation: Incremental production from the Raipur plant will drive higher EBITDA/t. We maintain our BUY rating.

We recommend a BUY with a near-term TP of Rs 1,750/sh, implying an upside of 10% from the CMP.

APL Apollo Tubes (APL) performance undershot our/street’s estimates. Key points: 1) Sales volume rose to a record 675kte; however, the proportion of Value Added Products (VAP) sales declined. 2) EBITDA rose 40.4% YoY mainly due to the ramp-up of Raipur plant.

Incremental production from the Raipur plant will drive higher EBITDA. We maintain our BUY rating.

APL Apollo Tubes’ (APL) Q1FY24 EBITDA missed consensus estimates by 10% though it was broadly in line with ours. Key points: 1) destocking in Q1FY24 impacted margins with EBITDA/te declining 6.5% QoQ to INR4,645; 2) sales volume was up 56.8% YoY (1.8% QoQ) at 662kte; and 3) volume from Raipur plant was at 75kte, slightly up QoQ. Going ahead, management expects growth to be largely volume-driven with capacity rising to 5.0mtpa by end-FY25.