APL Apollo Tubes Q2 Results Review - No Surprises; Free Cash Flow Improves Sharply In H1: IDBI Capital

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..IDBI Capital Report.APL Apollo Tubes Ltd.'s Q2FY24 profitability was inline with our expectation. Ebitda/tonne increased by 25% YoY to Rs 4,822, its volume grew by 11.9% YoY to 675,000 tonnes. Ebitda/tonne over Rs5,000 is likely to be sustainable over the longer term in our view. APL Apollo targets 400-500 kilo tonne of volumes from Raipur plant in FY24 which should aid margin improvement (mainly in H2 FY24). Overall, APL has lowered its volume guidance to 2.8 million tonnes (earlier guidance 2.8-3.0 million tonnes). It continues to target four million tonnes in FY25. We expect capex intensity to decline hereon which should lead to stronger payouts hereon. Broadly, we maintain our FY24-25 forecasts. We continue to value the stock at a price-to-earnings ratio of 35 times FY25E and derive a target price of Rs 1,577. However, given the recent rise in stock price, we downgrade the stock to a 'Hold'..Click on the attachment to read the full report:.APL Apollo Tubes Q2 Results: Profit Jumps 35%, In Line With Estimates.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

APL Apollo Tubes Q2 Results Review - No Surprises; Free Cash Flow Improves Sharply In H1: IDBI Capital

Higher margins driven by higher volumes

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