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Informist, Monday, May 4, 2026

 

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--APL Apollo: Energy crisis impacted volumes in March quarter 
--CONTEXT:Comments by APL Apollo management in post-earnings analyst concall 
--APL Apollo: Difficult to predict sales volume on a monthly basis 
--APL Apollo: To focus more on profitability than volumes in near future 
--APL Apollo Tubes: Dubai operations working at 40?pacity 
--APL Apollo Tubes: Target capex of INR 5-6 billion in FY27 
--APL Apollo Tubes: Dubai volumes low but margins are better 
--APL Apollo Tubes: Can say you could expect good dividend for FY27 
--APL Apollo Tubes: May share cash generated post Oct-Dec as dividend 
--APL Apollo Tubes: Hope to retire INR 5-bln liability by September quarter 
--APL Apollo Tubes: Target 25-30% PAT growth in FY27 
--APL Apollo Tubes: Target 15-20% volume, 20-25?ITDA growth for FY27 
--APL Apollo Tubes: To fund entire capex in FY27 from internal accruals 
--APL Apollo Tubes: To spend more on branding to gain market share 
--APL Apollo Tubes: Marketshare improved 60-65% in FY26, up from 55% in FY25 
 

 

By Adhithya Aji and Sunil Raghu

 

MUMBAI/AHMEDABAD – APL Apollo Tubes Ltd. is confident of being able to give out higher dividend for 2026-27 (Apr-Mar) from the volume of cash it would generate post the third quarter of FY27, the management said in its post-earnings analyst conference call on Monday. Generally a cash-surplus company, APL Apollo first wants to retire the INR 5 billion of liability it has on its books by the September quarter. The management said that post retiring the short-term working debt, the company would give out the remaining cash as dividend. The management is also confident in achieving earnings before interest, tax, depreciation, and amortisation growth of 20-25% in FY27. 

 

The management guided for net profit growth of 25-30% in FY27, and sales volume growth of 15-20%. The company expects demand from the construction sector to pick up once operations normalise from the disruptions caused by the West Asia crisis. "..., whatever is happening around us, it looks like things should settle down quickly, and we will be able to achieve our volume guidance," said Chetan Khandelwal, chief financial officer of the company. However, the company said it would focus more on the profitability front rather than volumes in the near future.

 

APL Apollo Tubes is targeting capital expenditure of around INR 5 billion–INR 6 billion in FY27 and expects this to be funded completely from internal accruals. "Our capex commitments, new land acquisition, new product development, distribution announcement in East India, that everything remains on track so that whenever things recover, we are quickly able to recover our lost volume and demonstrate good performance," Khandelwal said. 

 

APL Apollo Tubes said the energy crisis resulting from the ongoing West Asia crisis impacted volumes in the March quarter. The company said there was a shortage of raw material steel from Indian mills, and the global supply chain was disrupted due to the conflict. The Dubai plant of the company was operating at only 40% utilisation because of the crisis, the management said. "Then there is a fear of price correction in the rental prices because the prices have gone up so much in the last few months," according to Khandelwal. 

 

On market share, the management said it saw an improvement of 60-65% in FY26 compared to 55% in FY25. The company plans to set up new plants in east India to compete with small local players, and operationalise them in two to three years. APL Apollo is also going to build a new Bengaluru plant, Marlowe II, in the next two years. The company expects these investments to drive market share gains. "We will spend a bit extra on branding this year, which will again help us gain market share," the management added. 

 

For the March quarter, the company reported a consolidated net profit of INR 3.54 billion, up nearly 21% on year. Sales of the company rose nearly 12% on year to INR 62.69 billion. Both the top line and bottom line were above the Street's view of INR 62.50 billion and INR 3.54 billion, respectively. 

 

At 1422 IST, shares of the company were down nearly 3% at INR 1,849.60 on the National Stock Exchange.  End    

 

Edited by Avishek Dutta

 

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