Earnings Outlook
APL Apollo Jan-Mar consol PAT seen up on record volumes
This story was originally published at 10:40 IST on 25 April 2025
Register to read our real-time news.Informist, Friday, Apr. 25, 2025
By Shreya Shetty
MUMBAI - APL Apollo Tubes Ltd. is slated to post a strong performance for the March quarter owing to record sales volumes and a rollback of discounts, according to analysts.
Driven by higher volumes, the steel tubes and pipes maker is expected to report a consolidated net profit of INR 2.52 billion for the March quarter, up nearly 48% on year, according to the average of the estimates of eight brokerage firms. The highest estimate for the net profit was INR 2.60 billion by ICICI Securities Ltd., and the lowest was INR 2.43 billion by Equirus Securities Pvt. Ltd.
APL Apollo's revenue is expected to rise nearly 18% on year to INR 56.02 billion for the March quarter, according to the average of the estimates. Estimates for the revenue range from INR 52.53 billion by IDBI Capital Market and Securities Ltd. to INR 58.80 billion by Systematix Shares and Stocks (India) Ltd. While revenue is likely to be higher on year, the growth will be partly hit by a fall of around 9% in sales realisation, Axis Securities said. Sequentially, the company's revenue is expected to rise just 3%, while its consolidated net profit is expected to rise 16%.
The company's sales volume rose 25% on year to 850,447 tonnes in Jan-Mar, bringing the total sales volume in 2025-26 (Apr-Mar) to 3.16 million tonnes, up 21% on year, according to its quarterly business update.
The company's earnings before interest, tax, depreciation, and amortisation is likely to rise over 42% on year to INR 3.98 billion for the March quarter, as per the average of the estimates of the eight brokerages.
Its EBITDA is seen improving mainly due to a rollback of discounts, analysts said. The company had provided an additional discount of INR 500 per tonne in the September quarter to push sales amid a correction in steel prices. The company had opted for discounts to reverse the dampened sentiment of distributors and channel partners. While the INR 500 per tonne discount was reversed in October, the company still had an INR 300-INR 350 per tonne discount in place. "This (March) quarter, the company has rolled back all discounts, which will benefit their EBITDA majorly," said Ajit Sahu, an analyst at IDBI Capital Securities Ltd.
A recovery in domestic steel prices in the March quarter could also improve the company's EBITDA due to gains on inventory sales, analysts said.
Meanwhile, the 12% provisional safeguard duty on some steel products could help the company in the new financial year. The duty, which was enforced on Apr. 12 for 200 days, will prevent cheap foreign goods from flooding the domestic market.
With tariffs by the US taking being in focus in the March quarter, companies with business models focused on the local market, such as APL Apollo Tubes Ltd., should fare better, ICICI Securities Ltd. said. Being in the ferrous sector, the company seems to have a clear edge, particularly after the imposition of the provisional safeguard duty, the brokerage firm said.
Market participants should monitor the company's market share gain from patra-pipes, IDBI Capital said. Patra refers to pre-cut steel plates or sheets ready for further processing. They should also watch out for details about the company's EBITDA per tonne, any update on debt, overall utilisation levels, and the guidance for FY26 and FY27, the brokerage said.
The company is yet to announce the date when it will detail its March quarter earnings.
At 0946 IST on Friday, shares of APL Apollo stood at INR 1,613 on the National Stock Exchange, down 0.9%. Of the 11 brokerage reports on the company available with Informist, 10 have a 'buy' rating on the stock, while one has a 'hold' rating. Among the reports with a 'buy' rating, the highest target price of INR 2,076 was from Nuvama and the lowest of INR 1,417 was from Anand Rathi Share and Stock Brokers Ltd.
Following are the Jan-Mar earnings estimates for APL Apollo Tubes Ltd. based on reports from eight brokerage firms in descending order by the estimate of net profit:
Brokerage firm | Net sales (in INR mln) | Net profit (in INR mln) | EBITDA (in INR mln) |
ICICI Securities Ltd | 54,685.00 | 2,602.00 | 4,015.00 |
Systematix Shares and Stocks (India) Ltd | 58,800.00 | 2,600.00 | 4,000.00 |
Axis Securities Ltd | 54,410.00 | 2,600.00 | 3,920.00 |
Elara Securities (India) Pvt Ltd | 56,874.00 | 2,501.00 | 3,999.00 |
Motilal Oswal Financial Services Ltd | 56,743.00 | 2,492.00 | 3,990.00 |
Nuvama Wealth Management Ltd | 55,787.00 | 2,488.00 | 3,997.00 |
IDBI Capital Market Services Ltd | 52,539.00 | 2,439.00 | 3,955.00 |
Equirus Securities Pvt Ltd | 58,343.00 | 2,430.00 | 3,979.00 |
Average | 56,022.63 | 2,519.70 | 3,981.88 |
End
US$1 = INR 85.37
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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