APL Apollo Tubes Ltd. share price target

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 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.

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.