APL Apollo Tubes shares jump over 6%, hit fresh 52-week high
Domestic brokerage firm Motilal Oswal Financial Services has initiated coverage on the stock with a buy call, setting the target price of Rs 2,065
September 08, 2021 / 01:15 PM IST
APL Apollo Tubes' shares continued their winning run, jumping over 6 percent to hit their 52-week high of Rs 1,874.95 in intraday trade on BSE on September 8. The stock has gained 112 percent year-to-date (YTD) and brokerages believe it can still go higher.
Domestic brokerage firm Motilal Oswal Financial Services has initiated coverage on the stock with a buy call, setting the target price of Rs 2,065.
The brokerage firm expects a strong volume growth and improved profitability for the company due to higher demand across product segments, launch of new products and robust distribution network.
"We expect the company to deliver 20 percent/26 percent/35 percent consolidated revenue/EBITDA/PAT CAGR to nearly Rs 14,800 crore/Rs 1,360 crore/Rs 900 crore and generate strong cumulative CFO/FCF of
Rs 3,130 crore/Rs 2,080 crore over FY21-24E," Motilal Oswal said. "We value the stock at 35 times September 23E EPS and arrive at our target price of Rs 2,065."
The stock should fetch similar valuation as its peers in the building material space, due to its leadership and low-cost position in the structural tubes business, strong return ratio profile, and lower working capital days, it said.
The stock was trading 3.06 percent higher at Rs 1,819.25 at 1305 hours on BSE.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.