Please refer to important disclosures at the end of this report
APL Apollo Tubes Limited (APL) is a steel tube manufacturer. APL is engaged in
the business of production of electric resistance welded (ERW) steel tubes. APL is
expanding pipes capacity by ~54% to 2mn tpa by Q1FY18 from 1.3mn tpa. It is
setting up a greenfield plant with 0.2mn tpa capacity at Raipur in Chhattisgarh.
The company is also enhancing its capacity by another 0.5mn tpa at its existing
locations including Raipur using the direct forming technology (DFT) to produce
pipes for structurals. DFT technology will help in reducing ~10% conversion cost
on account of lower wastage and raw material usage. It will also provide the
flexibility to provide to more customized and small sized orders which will help in
improving the margin in coming years. Further, it also has plans to increase
volume of high margin galvanized pipes in its product profile going forward. APL
has strong balance sheet despite aggressive capacity addition and also with
improvement in cash flow APL may further deleverage its balance sheet in the
coming few years. The company has been maintaining a healthy dividend payout
of 22.04% (Div Yield: 1.08%). The company has reported a CAGR profit growth
of more than 20% and a healthy RoE of 18% for the last 5 years. Hence Buy.
CMP `918
Stock Info
Beta 1.0
Bloomberg Code
Shareholding Pattern (%)
Promoters 38.8
MF / Banks / Indian Fls 21.6
FII / NRIs / OCBs 25.4
Indian Public / Others 14.3
Abs. (%) 3m 1yr 3yr
Sensex (5.8) 1.7 27.4
APL Apollo Tubes 6.6 23.5 79.1
52 Week High / Low 1008/557
Avg. Daily Volume 6,483
Market Cap (
cr) 2,167
BSE Sensex 26,595
Nifty 8,180
Face Value (
Reuters Code APLA.BO
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
PL Apollo Tubes
Others | Steel
January 3, 2017
APL Apollo Tubes | Steel
January 3, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website:
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Disclosure of Interest Statement APL Apollo Tubes
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
: Reduce
-5% to -15%
< -15