Buy APL Apollo Tubes; target of Rs 1900: 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 Tubes (APL) performance undershot our/street’s estimates. Key points: 1) Sales volume rose to a record 675kte; however, the proportion of Value Added Products (VAP) sales declined. 2) EBITDA rose 40.4% YoY mainly due to the ramp-up of Raipur plant. 3) H2FY24 capex likely at a mere INR 2bn as capex at Raipur nears completion. 4) Working capital days in H1FY24 maintained at 5. Going ahead, management expects to hit rated 5mtpa capacity and EBITDA/te to expand to INR 6,000 by FY26.

Outlook

Taking cognizance of the current sales rate, we lower our FY24E/FY25E EPS by 6%/2%, resulting in a revised TP of INR 1,900 (earlier INR 1,930) based on an unchanged 40x FY25E. Lowerthan-expected volume growth remains the key risk to our thesis.

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APL Apollo Tubes - 31 - 10-2023 - icici