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Centrum Broking Report
APL Apollo Tubes Ltd. recorded in-line Ebitda of Rs 2.66 billion (our estimate: Rs 2.59 billion), up 31.5% QoQ on account of higher volumes.
APL Apollo Tubes came back strongly in Q4 FY22 with sales volume of 552 kilotonne, up 37% QoQ/27% YoY as it pushed low-margin general structures.
As a result, proportion of added products fell to 60% versus 65% in Q3 FY22. This reflects the strength of adjusted profit after tax that it can push volumes, if required.
Despite lower sale of added products, it recorded Ebitda/tonne of Rs 4,823, down 4% QoQ.
We observe near term weakness in demand as customers defer purchase in anticipation of lower prices.
However, the full commissioning of its upcoming Raipur plant (1.5 million tonnes per annum) in H1 FY23 will help adjusted profit after tax to record 23% volume compound annual growth rate over FY22-24E at average Ebitda/tonne of ~Rs 5,000.
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