APLAPOLLO - APL Apollo Tubes

📊 NSE: APLAPOLLO 🏢 Steel - Large 📅 Last Updated: 12/13/2025 18:24

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew 14.19% YoY to INR 20,689.54 Cr in FY25 from INR 18,118.80 Cr in FY24. In Q2 FY26, revenue reached INR 5,206.30 Cr, a 9% YoY increase, driven by a 13% YoY growth in sales volumes to 855,037 Tons.

Geographic Revenue Split

The company operates across India with key manufacturing hubs in Raipur, Bhuj, and an international presence in the UAE (Dubai). While specific regional % splits are not detailed, the Dubai and Raipur plants were cited as primary drivers for volume recovery in Q2 FY26.

Profitability Margins

Net Profit Margin for FY25 was 3.7%, a 38 bps decline from 4.0% in FY24. However, Q2 FY26 saw a massive recovery with Net Profit of INR 307.54 Cr, up 461% YoY. ROE improved from 19.4% in FY25 to 24.4% in Q2 FY26, while ROCE rose to 32.4% from 24.5% in FY25.

EBITDA Margin

EBITDA margin stood at 5.8% in FY25, a 78 bps decline from 6.6% in FY24 due to inventory losses in Q2 FY25. Q2 FY26 EBITDA surged 224% YoY to INR 450 Cr (INR 4.5 Bn), with EBITDA per ton increasing 187% YoY to INR 5,228, driven by a higher value-added product mix of 57%.

Capital Expenditure

The company has completed major capex at Raipur, Bhuj, and UAE. Future growth is expected from these incremental capacities without major debt-funded capex plans in the near term, maintaining a net debt-free position with net cash of INR 510 Cr as of Q2 FY26.

Credit Rating & Borrowing

Crisil reaffirmed 'CRISIL AA/Positive' and 'CRISIL A1+' ratings. Interest coverage ratio moderated to 7.5x in FY25 from 9.6x in FY24 due to lower EBITDA, but interest costs decreased 24% YoY in Q2 FY26 to INR 27.6 Cr.

⚙️ Operational Drivers

Raw Materials

Steel coils and strips used for Electric Resistance Welding (ERW) pipes represent the primary raw material cost, though specific % of total cost is not disclosed.

Import Sources

Sourcing is primarily domestic within India to support plants in Raipur and Bhuj, with international sourcing for the UAE (Dubai) facility.

Key Suppliers

Not specifically named in the documents, but the company maintains significant linkages with major steel producers for raw material procurement.

Capacity Expansion

Current sales volume is 855,037 Tons per quarter (Q2 FY26). Expansion is focused on ramping up utilization at the Raipur, Bhuj, and Dubai plants to sustain a 22% volume CAGR seen over the past 3 years.

Raw Material Costs

Raw material costs are highly sensitive to steel price volatility; inventory losses in Q2 FY25 significantly impacted margins. The company uses a 'margin over volume' strategy to mitigate these fluctuations.

Manufacturing Efficiency

Capacity utilization is recovering, particularly in Raipur and Dubai. The company achieved an EBITDA spread of over INR 5,000 per ton in Q2 FY26, up from previous quarters.

Logistics & Distribution

The company leverages an extensive distribution network and brand pull to maintain market leadership in the ERW segment.

📈 Strategic Growth

Expected Growth Rate

14%

Growth Strategy

Growth will be achieved through a 57% value-added product mix, capacity ramp-up in Raipur and Dubai, and a shift in focus from volume to high-margin products. The company targets an EBITDA of INR 450 Cr per quarter for the remainder of FY26.

Products & Services

Electric Resistance Welding (ERW) steel pipes, structural steel tubes, and value-added steel products for infrastructure and construction.

Brand Portfolio

APL Apollo

New Products/Services

Increased focus on value-added products which now contribute 57% of sales mix, up from 55% YoY, targeting higher EBITDA/ton.

Market Expansion

Expansion into the Middle East via the Dubai plant and strengthening the domestic footprint through the Raipur and Bhuj facilities.

Market Share & Ranking

Dominant market leader in the Indian ERW segment with a long track record of operations.

Strategic Alliances

The group includes wholly-owned subsidiaries like Apollo Metalex Private Limited (AMPL) and APL Apollo Building Products Private Limited (ABPPL).

🌍 External Factors

Industry Trends

The industry is shifting toward structural steel in construction. APL Apollo is positioning itself by increasing its value-added mix to 57% and investing in ESG-compliant manufacturing.

Competitive Landscape

Intense competition in the pipes and tubes industry with limited value addition from smaller players, which APL Apollo counters through scale and brand power.

Competitive Moat

The moat is built on a 0-day working capital cycle, dominant market share in ERW pipes, and a strong brand that allows for premium pricing (INR 2k-3k/ton premium).

Macro Economic Sensitivity

Sensitive to global trade uncertainty and fluctuations in domestic infrastructure spending by the government.

Consumer Behavior

Increasing demand for branded, high-quality structural steel products in the infrastructure sector.

Geopolitical Risks

Global trade uncertainty and potential trade barriers affecting the UAE operations or steel imports/exports.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with structural steel manufacturing standards and environmental pollution norms for steel processing units.

Environmental Compliance

Investing in solar/wind energy and water recycling to achieve zero liquid discharge across all operating units.

Taxation Policy Impact

Effective tax rate is implied in the transition from PBT of INR 960.44 Cr to PAT of INR 607.53 Cr for FY25.

Legal Contingencies

The company maintains an investor grievance redressal mechanism and reports high levels of transparency in board functioning; specific pending case values are not disclosed.