Buy APL Apollo Tubes : target of Rs 1110: ICICI Securities

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26 Aug, 2025 12:21

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ICICI Securities research report on APL Apollo Tubes

APL Apollo (APL) has announced a minority equity investment proposal by its wholly owned subsidiary APL Apollo Mart Limited (Apollo Mart) into Shankara Building Products Ltd (Shankara). APL will end up owning ~9.9% of Shankara for a total investment of Rs1.8bn (~6% of APL’s total capital employed as on endDec’21). This will be through a combination of purchase of secondary promoter shares (1mn shares @Rs755/share) and proposed preferential allotment of convertible warrants (1.4mn shares @Rs750/share). Shankara was valued at 0.9x EV/sales (FY22 annualised). The investment will be funded via internal accruals and is expected to be EPS and RoCE accretive from the very first year.

Outlook

APL sees an opportunity to potentially double its existing sales from Shankara. We maintain BUY on APL with a target price of Rs1,110/share.

More Info

At 15:40 hrs APL Apollo Tubes was quoting at Rs 936.85, down Rs 26.55, or 2.76 percent.

It has touched an intraday high of Rs 958.45 and an intraday low of Rs 930.60.

It was trading with volumes of 18,483 shares, compared to its thirty day average of 26,003 shares, a decrease of -28.92 percent.

In the previous trading session, the share closed up 5.91 percent or Rs 53.75 at Rs 963.40.

The share touched its 52-week high Rs 1,113.65 and 52-week low Rs 585.08 on 16 December, 2021 and 19 April, 2021, respectively.

Currently, it is trading 15.88 percent below its 52-week high and 60.12 percent above its 52-week low.

Market capitalisation stands at Rs 23,447.53 crore.

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