Apollo Pipes Q1 Results Review - Industry-Leading Volume Growth; Robust Outlook Intact: Systematix

"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..Systematix Research Report.Apollo Pipes Ltd. reported strong industry-leading volumes (up 19% YoY and 3% QoQ) in Q1 FY24. However, lower-than-expected realisation (Rs 123/kg, down 19% YoY and 9% QoQ) and Ebitda (10.1% margin; Rs 12.3/kg, down 11% YoY and 22% QoQ) led to 15% miss in profit after tax (up 58% YoY, down 7% QoQ). Gross margin dipped 132 basis points QoQ, as Apollo Pipes priced aggressively to chase market share (in line with its strategy). Inventory loss (~1% of revenue) too impacted margins. With the aim to achieve compound annual growth rate of 25% in volumes and 30% in revenue over next few years, along with ~25% return on capital employed, Apollo Pipes is looking to add capacities in East, West and South India and cater to these markets to fulfil its pan-India aspirations. Over three-four years, Apollo Pipes aims to double capacity to 286,000 tonne at a capex of over Rs 5 billion. A 25,000 tonne capacity in Dadri (Rs 1.5 billion capex; all value added product such as CPVC, HDPE, fittings) is likely to be operational in Q4 FY24. We broadly maintain our profit after tax estimates and remain sanguine on Apollo Pipes’ industry-leading performance. We estimate 20%/22%/66%/115% CAGR in volume/ revenue/Ebitda/profit after tax over FY23-25E, with an return on equity of ~17% and RoCE of ~23% for FY25E. Considering its robust prospects driven by pan-India aspirations and a richer product mix towards non-agri VAP, we maintain our 'Buy' rating on the stock, with a revised target price of Rs 896 (Rs 825 earlier), based on 32 times FY25E price/earning (30 times earlier). Volume growth and margins are key near-term monitorables..Click on the attachment to read the full report:.Amber Enterprises Q1 Results Review - A Mixed Bag; Healthy Growth, Margin Outlook: Systematix.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."

Apollo Pipes Q1 Results Review - Industry-Leading Volume Growth; Robust Outlook Intact: Systematix

Over three-four years, Apollo Pipes aims to double capacity to 286,000 tonne at a capex of over Rs 5 billion.

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Apollo Pipes Q1 Results Review - Industry-Leading Volume Growth; Robust Outlook Intact: Systematix

Over three-four years, Apollo Pipes aims to double capacity to 286,000 tonne at a capex of over Rs 5 billion.

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