Motilal Oswal's research report on APL Apollo Tubes
APAT reported a recovery in EBITDA/MT (up 3% YoY/10% QoQ) to INR4,970 on back of broad based improvements across the product portfolio, despite a lower VAP mix by 6pp YoY to 54% and higher costs for stabilizing the new Raipur plant. Volumes in 4QFY23 grew by 18% YoY/7% QoQ to 650KMT, ending FY23 with total sales volume of ~2.28MMT (up 30% YoY).
Outlook
We maintain our FY24/FY25 earnings estimates as APAT is expected to maintain its growth trajectory on a strong demand outlook. We value the stock at 33x FY25E EPS to arrive at a TP of INR1,490. Reiterate BUY.
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