Motilal Oswal's research report on APL Apollo Tubes
APL Apollo Tubes (APAT) reported a weak operating performance with 14%/ 33% YoY decline in Gross Profit/EBITDA per MT, respectively, in 1QFY23. The result was adversely impacted by the industry-wide channel destocking prompted by the correction in domestic HRC prices and lower share of value added products (VAP). We retain our FY23E/FY24E earnings as APAT is likely to maintain its growth trajectory underpinned by a strong demand outlook.
We value the stock at 33x FY24E EPS to arrive at our TP of INR1,190. Reiterate BUY.
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