APL Apollo Tubes Gets 'Accumulate' As Dolat Capital Initiates Coverage After Q3 Results

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Dolat Capital Report

We are initiating coverage on APL Apollo Tubes Ltd. with 'Accumulate’ rating and target price of Rs 1,830 valuing at 32 times FY27E earnings. Adjusted profit after tax has become India’s largest producer of structural steel tubes, boasting an installed capacity of 4.3 mtpa as of end Q3 FY25. The company aims to increase its total installed capacity to 5 mtpa by FY26E.

Management targets sales volume growth of ~22% in FY25 to 3.2 metric tonne, followed by 4 MT/5MT for FY26/27E respectively. We believe that the ramp-up of new facilities will enhance the topline, while improvements in the product portfolio through a greater proportion of value-added products will support margins. Q3 FY25 witnessed best-ever quarterly Sales volume, Ebitda and PAT.

The company’s volume expansion plan, aggressive market share augmentation and product mix improvement initiatives are key positives. We expect revenue/Ebitda/PAT CAGR of 24/38/50% over FY25-27E. The stock is currently trading at P/E of 39/28 on FY26/FY7E EPS.

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