APL Apollo Tubes Ltd

APL Apollo Tubes Sets Ambitious 7M Ton Target & Revises FY'26 Guidance 📊🔧

- Targeting 7M tons capacity in 2-3 years via new plants in Eastern India (500K tons), Dubai (200K tons), South India (400K tons), and Bhuj (exports).

- New product lines: 500K tons coated capacity, 100K tons heavy structural tubes, and 300K-400K tons specialty tubes.

- Revised FY'26 volume growth guidance to 10%-15% (from 15%-20%) due to weak H1; H2 expected to improve post-monsoon and government spending.

- EBITDA spread target for FY'26: Rs. 4,600-5,000/ton (vs. <Rs. 4,000/ton in FY'25).

- 72% renewable energy usage in plants; target 80%-85% in 2-3 years to cut power costs (currently 0.8% of product value).

- Net cash position; working capital days in single digits. Plans to allocate 25% cash flow each to CAPEX, shareholder rewards (dividend/buyback), and liability reduction.

- Divested Shankara stake (4.5% in FY'25, balance in Q1 FY'26) after achieving sales growth target.

- General segment EBITDA spreads rose to ~Rs. 2,800/ton (from <Rs. 2,000/ton) due to de-commoditization; exports from Dubai contribute Rs. 4,000-5,000/ton.

- Strong demand expected from infrastructure (railways, aviation), solar, and private sectors (warehousing, data centers).

- Current capacity utilization: Dubai (~60%), Raipur (<60%).

- ROCE focus: Inventory turnover 15x/year; exploring cash discounts from suppliers to offset reduced creditor days.