Prabhudas Lilladher's research report on Apar Industries
We revise our FY25/26E EPS estimates by +5.1%/+3.3%, factoring in strong outlook in the Conductors segment. Apar Industries (APR) reported revenue growth of 9.0% YoY, while EBITDA margin contracted by 91bps YoY vs a high base in Q4FY23. Despite sluggish US demand caused by inventory destocking, there has been an uptick in order intake, with improvement anticipated in FY25. Meanwhile, robust domestic demand continues to offset weak sales in US market. Robust opportunities presented by private and public capex in T&D industry along with transition from ACSR to AL-59 alloy conductors will drive growth in Conductors business. Cables business outlook remains promising, with expanding opportunities in renewable energy, railway, defense, and other sectors. We believe APR’s focus towards value-added products and strong traction in exports business will continue to drive strong topline & profitability in the long run. The stock is currently trading at a P/E of 41.3x/32.2x FY25/26E.
Outlook
We roll forward to Mar-26 and maintain an ‘Accumulate’ rating with a revised SoTP-derived TP of Rs8,877 (Rs6,890 earlier) valuing Conductors/ Cables/Specialty Oil segments at 35x/40x/15x FY26E (27x/33x/12x Dec-25E earlier) owing to a robust business outlook across segments.
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