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ICICI Securities Report
Our visit to APL Apollo Tubes Ltd.'s Raipur plant reveals that growth drivers are in place for the company. Management has launched two new categories:
500mm x 500mm in the heavy structural segment; and
coated products for roofing application.
We believe that as capacity utilisation at the Raipur plant improves, Ebitda/tonne is also expected to improve beyond Rs 5,000/tonne in FY25E (our estimate at Rs 5,130/tonne).
Taking cognizance of robust growth prospects, we raise our price-to-earning multiple to 40 times (earlier 36 times) FY25E, resulting in revised target price of Rs 1,930 (earlier Rs 1,740). Maintain ‘Buy'.
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