Hold Apar Industries; target of Rs 9540: Prabhudas Lilladher

Prabhudas Lilladher's research report on Apar Industries

We interacted with the management of Apar Industries (APR) to discuss the implications of the US reciprocal tariffs, the prevailing demand environment, and prospects. Management indicated that the tariffs are unlikely to materially impact the conductors business, though they may have a marginal effect on the cables segment (~20% exposure to the US). In conductors, India’s growing reconductoring opportunity is expected to be a key growth driver. The cables business is positioned for strong momentum, with management targeting to reach ~Rs100bn in revenue over the next three years, supported by rising demand for specialty, power, and low-duty cables driven by the energy transition. Meanwhile, APR’s transformer oils segment is expected to maintain >10% revenue CAGR with healthy margins, underpinned by robust global demand and the company’s dominant share in India’s HVDC transformer oil market.

Outlook

The stock is trading at a P/E of 32.7x/29.4x on FY26/27E earnings. We maintain our ‘Hold’ rating valuing the Conductors/Cables/Specialty Oils segment at a PE of 35x/35x/12x Mar’27E (same as earlier) arriving at a SoTPderived TP of Rs9,540 (same as earlier).