APL Apollo Tubes Ltd. share price target

We maintain our BUY rating.

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

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.