Earnings Review
APL Apollo posts highest profit growth in 5 qtrs, beats view
This story was originally published at 18:27 IST on 20 January 2025
Register to read our real-time news.Informist, Monday, Jan. 20, 2025
Please click here to read all liners published on this story
--APL Apollo Oct-Dec consol net profit INR 2.17 bln vs INR 1.66 bln yr ago
--Analysts saw APL Apollo Oct-Dec consol net profit INR 2.03 bln
--APL Apollo Oct-Dec consol revenue INR 54.33 bln vs INR 41.78 bln year ago
--APL Apollo Apr-Dec consol net profit INR 4.64 bln vs INR 5.62 bln yr ago
--APL Apollo Apr-Dec consol revenue INR 151.81 bln vs INR 133.53 bln yr ago
--APL Apollo Oct-Dec consol EBITDA INR 3.46 bln vs INR 2.80 bln year ago
--APL Apollo Oct-Dec consol EBITDA/tn INR 4,173 vs INR 4,631 year ago
--APL Apollo Oct-Dec value added sales mix 56% vs 55% qtr ago
--APL Apollo sees total capacity at 5 mln tn by FY26
By Anjana Therese Antony
MUMBAI – Tube maker APL Apollo Tubes Ltd. posted its strongest growth in bottom line in five quarters for Oct-Dec and beat the Street's estimates by a slight margin. Its top line growth was also the highest in six quarters and beat views, supported by a strong increase in volumes, as predicted by analysts.
The tube maker's consolidated net profit rose 31.1% on year to INR 2.17 billion, beating the Street's estimate of INR 2.03 billion. The company had missed the September quarter net profit estimate by a wide margin due to high inventory losses and increased other expenses.
The consolidated revenue for Oct-Dec grew 30% on year to INR 54.33 billion, against analysts' expectation of INR 52.88 billion. Sequentially, the bottom line rose by a whopping 303% and top line grew by nearly 14%.
In an update on the December quarter released on Jan. 1, the company had reported its highest-ever quarterly sales volume of 828,200 tonnes, up 37% on year. In Apr-Dec, sales volume grew 19% from a year ago to 2.31 million tonnes. The Uttar Pradesh-based company expects its total production capacity to reach 5 million tonnes by 2025-26 (Apr-Mar). This includes existing capacity of 4.30 million tonnes, three proposed greenfield plants totaling 610,000 tonnes, and brownfield expansion of 90,000 tonnes. The company's three proposed greenfield plants in eastern Uttar Pradesh, West Bengal, and Karnataka will have an incremental market opportunity of 1.50 million tonnes.
"This strong performance came despite a challenging macroeconomic environment, weak retail demand and ongoing slowdown in government infrastructure spending," Chairman Sanjay Gupta said in a post-earnings investor presentation released by the company. "We continue to remain prudent with our working capital management, which remains best in the construction material sector," Gupta said.
For the nine months ended December, the bottom line declined more than 17% on year to INR 4.64 billion, while the top line rose nearly 14% to INR 151.81 billion. The company released its quarterly results during market hours. The stock was up 2.9% at INR 1,615.90 before the earnings were announced. It closed the day 1.3% higher at INR 1,590.05 on the National Stock Exchange. The stock has risen nearly 12% in the last seven days, but just 1% in 90 days. It has fallen nearly 12% from its record high of INR 1,800 hit on Sept. 6, 2023.
Earnings before interest, tax, depreciation, and amortisation rose nearly 24% on year to INR 3.46 billion. Along with the operating profit, the company's cash profit grew 26% on year to INR 2.7 billion. However, its EBITDA per tonne declined 10% from the previous year to INR 4,173. For the September quarter, its EBITDA per tonne was INR 1,821, the lowest in the last five financial years. The company had then said it sees EBITDA per tonne at INR 5,040 by FY27.
On the expenses front, the tube maker's overall spending during the quarter increased at the same pace as its revenue and was INR 51.74 billion. Cost of materials consumed, which accounts for about 79% of the total expenditure, rose 5.9% on year to INR 40.87 billion. This was the fastest growth in the metric since the June quarter and the second-highest rise in five quarters.
The company said its market share in structural steel tubes will increase to 8.3% in 2030 from 6.5% in FY24, indicating a growth to 17.30 million tonnes from 9 million tonnes. "Commissioning of new blast furnace HR (hot rolled) mills in next 3-4 years which will increase supply of HR coil in India," it said. The company expects crude steel production in India to grow to 210 million tonnes in 2030 from 139 million tonnes in FY24. It anticipates the structural steel tube industry in the country to grow at a compound annual growth rate of 10% from FY24 to 2030. APL Apollo's value added sales mix was 57% compared to 55% a quarter ago. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
