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Motilal Oswal Report
APL Apollo Tubes Ltd.'s diversified product portfolio and pan-India presence helps in mitigating concentration risk.
Higher sweating of assets (capacity utilisation at 63%) will lead to kicking-in of operating leverage and better profitability.
Robust distribution network, along with warehouses, higher retail network, and stock keeping units are expected to improve last-mile connectivity.
APL Apollo is the fifth largest player globally and leader in the domestic market, with an aggregate capacity at 2.6 million metric tonne.
Steady capacity addition, increase in penetration, and gains from unorganised players are expected to improve market share from current levels (~50%).
The merger with Apollo Tricoat Tubes' (Tricoat) is margin and return on equity accretive and is expected to create value for shareholders.
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