Buy APL Apollo Tubes; target of Rs 1930: Motilal Oswal

Motilal Oswal is bullish on APL Apollo Tubes recommended buy rating on the stock with a target price of Rs 1930 in its research report dated October 03, 2023.

Broker Research

October 04, 2023 / 14:01 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on APL Apollo Tubes

We visited the recently commissioned Raipur plant of APAT and interacted with some of the key personnel. The inception of the Raipur plant dates back to FY21, initiated by APL Apollo Building Products Pvt Ltd. (ABPL), a wholly owned subsidiary of APAT, located in Village Simga, Baloda bazar district in Chhattisgarh (almost 60 Km from Raipur Airport). Key aspects of this plant are: It is the largest plant for the company with an installed capacity of 1.2MTPA and scope to further expand by 0.1MTPA through debottlenecking It is strategically located in close proximity to raw material suppliers; additionally, this strategic location enables the company to serve multiple regions efficiently, given its Central position in India. The Raipur plant will manufacture only value-added products (VAP), which will drive up the overall margin profile for the company. Additionally, these plants will be manufacturing products, marking the first production of its kind in both India and the world. The plant was recently commissioned and the production volume is rapidly increasing, with the target of achieving a quarterly run rate of 0.18-0.2MTPA by 4QFY24.

Outlook

We project a revenue/EBITDA/PAT CAGR of 25%/43%/50% over FY23–25. We value the stock at 33x Sep’25E EPS to arrive at a TP of INR 1,930. We maintain our BUY rating on the stock.

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