Buy Apar Industries; target of Rs 10,399: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Apar Industries has recommended buy rating on the stock with a target price of Rs 10,399 in its research report dated May 29, 2024.

Broker Research

August 30, 2024 / 10:24 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Apar Industries

We attended Apar Industries (APR) investor day, wherein management highlighted key long-term opportunities driven by large investments in infrastructure (T&D, renewables, transportation, telecom, defence, etc.) Conductors growth will be driven by T&D infrastructure expansion, railway modernization, CTC demand, reconductoring & premiumization in domestic market (HTLS, AL-59, etc.), and demand for conventional products in export markets. Cables is set to be the fastest growing segment given the robust opportunities in solar, wind and defence where Apar is a leading cable supplier in India, growth in E-beam house-wires, renewable opportunities in U.S. & Europe, and telecom network expansion. Speciality Oil growth will be driven by Transformer Oils (T-oils) and Lubricants. Apar is making sizeable capex investments worth Rs3-3.5bn per year in Conductors and Cables to position itself to capitalize on the slew of opportunities available.

Outlook

We are positive on APR owing to 1) robust T&D capex driving demand across segments, 2) focus on premium conductors in domestic market, 3) healthy traction in elastomeric cables used in renewables, defence and railways, and 4) market leadership in the growing T-oils business. The stock is trading at a P/E of 40.0x/32.2x FY25/26E. Given that the stock has corrected slightly, we upgrade the rating to ‘BUY’ from Accumulate with an unchanged SoTPderived TP of Rs10,399, valuing Conductors/ Cables/Speciality Oil segments at 40x/43x/17x FY26E (same as earlier).

For all recommendations report, click here