APL Apollo Tubes (533758) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 sales volume was 744,823 tons, down 6% year-over-year and 20% sequentially, due to geopolitical and macroeconomic challenges, but profitability exceeded expectations with EBITDA per ton up 18% to INR 5,522 and improved pricing power.

• Revenue grew 8% year-over-year to Rs 56.1 billion, with net profit up 11% to Rs 2.6 billion, despite lower volumes, driven by a better sales mix and brand strength.

• Cash on books stood at INR 14 billion at quarter-end, with working capital days at or below zero, reflecting strong balance sheet management.

• Board approved participation in a new Group Shared Services Company, investing up to ₹1 crore for a 20% stake, to centralize support services.

• Subsidiary Apollo Metalex Limited initiated consolidation of manufacturing operations, including phased closure and asset sale of a unit, to optimize costs and efficiency.

Financial highlights

• Consolidated revenue from operations for Q1 FY27 was ₹5,606.71 crore, up from ₹5,169.77 crore in Q1 FY26; EBITDA rose 11% YoY to Rs 4.1 billion, with EBITDA per ton above INR 5,500.

• Net profit for Q1 FY27 was ₹263.11 crore (consolidated) and ₹146.98 crore (standalone), both up year-over-year.

• Cash balance at INR 14 billion as of June, slightly down from INR 15 billion in March.

• Net working capital days remained at or below zero, indicating efficient capital management.

• Basic and diluted EPS (consolidated) for Q1 FY27 was ₹12.76, up from ₹8.54 in Q1 FY26.

Outlook and guidance

• Management targets 15%-20% volume growth and over 20% EBITDA growth for FY 2027, with EBITDA per ton guidance at INR 5,000–5,500 and a long-term target of INR 6,000/ton as capacity ramps up.

• Q2 expected to be better than Q1 in both volume and EBITDA, with second half performance anticipated to be stronger, supported by government infrastructure spending.

• Capacity expansions in Gorakhpur, Siliguri, Malur, and a new plant in Maharashtra or North Karnataka to add 2 million tons over 2.5 years.

• Strategic restructuring and capital allocation initiatives are expected to enhance operational efficiency and support future growth.