More Stories

Informist, Monday, Jan. 20, 2025

By Aman Aryan

MUMBAI – APL Apollo Tubes Ltd. expects its sales volume to reach 3.1 million-3.2 million tonnes for 2024-25 (Apr-Mar) and its earnings before, interest, tax, depreciation, and amortisation to be slightly better than the previous financial year, the company's management said in a post-earnings conference call. Despite multiple macroeconomic headwinds such as weak retail demand and a slowdown in the government spending, the company gained significant market share in the overall steel pipe market and managed to achieve near 20% sales growth during Apr-Dec due to their focus on increasing sales volume and scaling up competition, the management said.

The near 20% sales growth is likely the highest among steel pipe companies, the management said. The structural steel tube maker's Apr-Dec volume rose 19%, according to the company's investor presentation. The management said going forward the company will likely post a sequential growth in sales. APL Apollo Tube expects the company to post 4 million tonnes and 5 million tonnes of sales volume in FY26 and FY27, respectively.

Its international sales volume has also been strong with the commencement of the plant in Dubai, the management said. The company had reported its highest ever quarterly sales during the December quarter. Monday, the company reported the strongest consolidated net profit growth in five quarters for the December quarter. APL Apollo Tubes' consolidated net profit rose 31.1% on year to INR 2.17 billion and its consolidated revenue rose 30% to INR 54.33 billion.

APL Apollo Tubes capacity is expected to rise to 5 million tonnes in the next year from the current 4.3 million-4.5 million tonnes, the management said, adding this will require a capital outlay of INR 6 billion, which will be funded from internal cash flows over the next 3–4 quarters. Of the proposed 5-million-tonne capacity, general products will have an annual capacity of 1.5 million tonnes and value-added products will have an annual capacity of 3.5 million tonnes.

For the Raipur plant, the company said it utilised 55% capacity of the extended 1.2 million tonnes of annual capacity of the plant. The management said the company would likely have utilised more if the company had not lost volumes due to lack of raw material availability. The ramp up of production in Raipur along with APL Apollo Tubes' entry into the eastern market with commencement of plants in Gorakhpur and Siliguri are other expected drivers for the company's growth, the management said.  

The company sees INR 400-INR 500 per tonne of operating leverage benefit over the next 1-2 years as the capacity utilisation nears 100%. Apart from these, APL Apollo Tubes' plan to withdraw discounts after an improvement in the demand momentum will also help the company's earnings, the management said. While the steel tube making company's Apr-Dec EBITDA per tonne fell short of the higher end of the projected EBITDA per tonne estimate, it will likely meet the target in the March quarter, the company officials said.

The management said the company would likely post an EBITDA per tonne of over INR 4,500 in Jan-Mar and so far the company has good orders in the ongoing quarter. APL Apollo posted an EBITDA per tonne of INR 4,173, up 10% on year.

The company said it plans to introduce new products every quarter going forward. "...everyone is hoping that with this budget, which is due over the next few days, the release of funds will start and that will give push to the overall spending from the government side," the company's management said. 

Although there has been some delay in the release of funds and a slowdown in the government spending, sectors such as railways and aviation, which have been the core focus areas for the government, continue to do well. However, sectors such as water transportation and infrastructure were slow, the company's official said. 

For exports, the management said the company is witnessing some de-stocking in some export markets. However, the company expects its business to post volume-driven growth in the West Asia going forward. Speaking on the secondary business, the company said it is not sustainable and "apart from India, there is no secondary business in the whole world". While the solar tube is a new segment for the company, good volumes are expected in the next 2-3 quarters in the segment, the management said.

The company's other expenses for the December quarter rose nearly 35% on year and 9.2% sequentially. Freight and power and fuel form a major part of the company's other expenses, the management said. 

Monday, shares of the company closed at INR 1,590.05 on the National Stock Exchange, up 1.3%.  End

Edited by Akul Nishant Akhoury

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.