Sharekhan's research report on APL Apollo Tubes
Consolidated revenues came in tad below estimates led by healthy volume growth. EBITDA/tonne hits trough led by inventory loss and sales discount. Operating and net profits starkly lower than estimates. Management may surpass its 3.2 million sales volumes guidance for FY2025 led by 10% q-o-q sales volume growth in Q3FY2025 and Q4FY2025. EBITDA/tonne expected to reach Rs. 5000 over 2-3 quarters and remain stable in FY2026. Its capacity target of 5 million tonnes by FY2026 stay on track with 6.1 LTPA greenfield expansions and 0.9 LTPA brownfield expansions.
Outlook
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.
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