Apollo Pipes Q1 Review - Tepid Results; Robust Guidance Intact Though: Systematix

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Report.Apollo Pipes Ltd. Q1 volume/revenue (up 25%/19% YoY and 24%/21% QoQ) was aided by consolidation of Kisan Mouldings (volume 5,625 tonne, revenue Rs 680 million, Ebitda margin 6.8%, profit after tax Rs 30 million).However, operating result (Ebitda up 11% YoY, 9.4% margin, Rs 10.9/kg) stayed weak. Volume was flattish at 20,937 tonne excluding. Kisan (5,625 tonne). Lower offtake of infra pipes (HDPE) due to general election impacted volume (temporary issue). Volume excluding. High Density Polyethylene pipe grew 10% YoY, led by CPVC pipe (revenue up 20% YoY) and Water-tank (revenue up 30% YoY).Despite weak Q1, Apollo Pipes maintains its three-year guidance (30% volume compound annual growth rate including. Kisan, ~11% Ebitda margin, <60 days of working capital cycle leading to 25-30% Return on Capital Employed). Focus will be to gain market share over margins in the next few years. ~2 times capacity of 286kt in three years on Rs 5 billion capex will aid growth. A 30kt facility near Varanasi at Rs 1.5 billion capex is likely start production in Q4 FY25.Kisan is likely to achieve peak utilisation by FY26 end (~40% currently) and clock Rs 8 billion plus revenue with 10%+ Ebitda margin in FY27. We maintain earnings estimates. On 30% volume compound annual growth rate guidance (including. Kisan), we expect 33%/38%/57% compound annual growth rate in revenue/Ebitda/profit after tax over FY24-26E.Large capex over next two-three years will keep RoCE low (~13% in FY26E). We thus maintain 'Hold' on Apollo Pipes with an unchanged target price of Rs 691 (26 times FY26E price to earning). Volume growth, margin trajectory and integration of Kisan Mouldings are key monitorable..Click on the attachment to read the full report:.ITR Filing 2024: Why E-Verification Is A Crucial Step In The Process.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Apollo Pipes Q1 Review - Tepid Results; Robust Guidance Intact Though: Systematix

Volume growth, margin trajectory and integration of Kisan Mouldings are key monitorable, says the brokerage.

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