APOLLOPIPE - Apollo Pipes

📊 NSE: APOLLOPIPE 🏢 Plastics Products 📅 Last Updated: 12/13/2025 18:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for Q2FY26 was INR 236 Cr, representing a 6% YoY decrease and a 14% QoQ decline. On a standalone basis (Ex-Kisan), revenue was INR 194 Cr, while the subsidiary Kisan Mouldings contributed INR 47 Cr. The decline was primarily driven by lower revenue realization and an extended monsoon affecting agricultural and home plumbing demand.

Geographic Revenue Split

Not specifically disclosed by region in the provided documents, though the company operates 7 manufacturing plants across India and maintains a distribution network of 1,000+ channel partners and 10,000+ customer touchpoints.

Profitability Margins

Net Profit Margin for FY25 was 2.9%, down from 4.3% in FY24 (a 47% decline). In Q2FY26, consolidated PAT was INR 1.6 Cr, a 61% YoY decrease. Standalone PAT margin was 1.1% (INR 2.1 Cr) while Kisan Mouldings reported a negative PAT margin of -1.2% (loss of INR 0.6 Cr).

EBITDA Margin

Consolidated EBITDA margin for Q2FY26 was 6.7%, a decrease of 106 bps YoY. Standalone EBITDA margin was 8.9% (INR 17 Cr), but was dragged down by Kisan Mouldings which operated at a -2.8% EBITDA margin (loss of INR 1 Cr) due to lower volume run rates and negative operating leverage.

Capital Expenditure

The company plans to expand annual capacity to 286,000 Ton in the next 2 years from the current 226,500 Ton. This expansion is intended to be funded entirely through internal cash flow generation without leveraging the balance sheet.

Credit Rating & Borrowing

ICRA reaffirmed ratings of [ICRA]A+ (Stable) for long-term and [ICRA]A1 for short-term facilities on a total rated amount of INR 150 Cr as of July 14, 2025. The company maintains a net cash position of INR 8 Cr as of Q2FY26.

⚙️ Operational Drivers

Raw Materials

PVC Resin is the primary raw material. Frequent and sharp fluctuations in PVC resin prices triggered cautious behavior and continuous destocking by channel partners, leading to marginal inventory losses (estimated sub-50 bps of sales).

Import Sources

Lubrizol (partner for CPVC) imports material and supplies it from their local depots in India.

Key Suppliers

Lubrizol is a key strategic supplier and partner for CPVC resin and technology.

Capacity Expansion

Current installed capacity is 226,500 TPA across 7 manufacturing plants. The company is on track to expand this to 286,000 TPA within the next 2 years to support a 25% revenue CAGR target.

Raw Material Costs

Raw material expenses for Q2FY26 were INR 132 Cr for standalone operations (68% of standalone revenue) and INR 32 Cr for Kisan Mouldings (68% of Kisan revenue). Procurement is sensitive to global PVC price volatility.

Manufacturing Efficiency

Average capacity utilization in FY25 stood at 66% for PVC, 21% for OPVC, 78% for Injection Moulding (IMD), and 21% for HDPE. Q2FY26 saw negative operating leverage as volumes (21,685 MT) were below the optimal 26,000-27,000 MT threshold.

Logistics & Distribution

Distribution is handled through 1,000+ channel partners and 10,000+ customer touchpoints to ensure pan-India availability of 3,000+ SKUs.

📈 Strategic Growth

Expected Growth Rate

25%+

Growth Strategy

Growth will be driven by expanding capacity to 286,000 TPA, increasing the CPVC sales mix from 15-18% to over 25% through the Lubrizol tie-up, and scaling high-margin products like OPVC pipes and UPVC windows. The company also aims to turnaround Kisan Mouldings (57.59% stake) to eliminate its current EBITDA drag.

Products & Services

CPVC, UPVC, and HDPE pipes and fittings, PVC-O pipes, PLB ducts, DWC pipes, PE gas pipes, water tanks, solvents, bathroom accessories, and UPVC doors and windows.

Brand Portfolio

Apollo Pipes, APL Apollo (leveraged for window profiles), and Kisan Mouldings.

New Products/Services

Recently launched PLB ducts, DWC pipes, PE gas pipes, and PVC-O pipes. Forayed into UPVC doors and windows, which are expected to be high-margin contributors as they leverage the APL Apollo brand premium.

Market Expansion

Focusing on increasing market presence in the building materials space and infrastructure segment, targeting a sales volume of 100,000 to 105,000 tons for FY26.

Market Share & Ranking

Ranked among the Top 6 leading PVC pipe manufacturers in India.

Strategic Alliances

Strategic tie-up with Lubrizol for CPVC products to improve EBITDA spreads and match top-tier competitors.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward organized players who can better manage price volatility. While Q2FY26 was weak due to monsoons, the H2FY26 outlook is positive due to expected pickups in construction and infrastructure projects.

Competitive Landscape

Faces intense competition from other top 5-6 organized players, which has recently put pressure on EBITDA spreads and necessitated higher discounts.

Competitive Moat

Moat is built on a 5-year revenue CAGR of 24%, a massive distribution network of 10,000+ touchpoints, and the 'APL Apollo' brand equity. The Lubrizol partnership provides a technological moat in the CPVC segment.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and private real estate cycles. Low government spend on infrastructure recently resulted in underperformance of the high-margin OPVC segment.

Consumer Behavior

Channel partners exhibit 'cautious behavior' and destock during periods of PVC price volatility to avoid inventory losses.

Geopolitical Risks

Global supply chain disruptions affecting PVC resin availability or pricing could impact the cost structure.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to Section 129(3) of the Companies Act, 2013 for consolidated reporting and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Environmental Compliance

Not specifically disclosed in INR, but the company complies with local statutory requirements for its 7 manufacturing units.

Taxation Policy Impact

Effective tax expense for Q2FY26 was INR 3 Cr on a standalone PBT of INR 5 Cr.

Legal Contingencies

No specific pending high-value court cases or legal disputes were detailed in the provided financial summaries.

⚠️ Risk Analysis

Key Uncertainties

PVC resin price volatility is the primary risk, impacting margins by causing inventory losses and affecting distributor demand. Kisan Mouldings' integration and turnaround remains a key operational uncertainty.