Apollo Pipes Q3 Review - Higher Value Added Product’s Contribution To Improve Profitability: Yes Securities

Yes Securities Report

Apollo Pipes Ltd., reported highest ever quarterly volumes of 18,011 tonne, a growth of 44% YoY (on low base) and stellar 16.5%QoQ growth. Volume growth was driven by strong demand from plumbing segment backed by healthy demand from agriculture segment.

Amidst the falling PVC prices in Oct‐Nov-22, company largely maintained its average selling price on sequential basis at Rs 131/kg (versus Rs 152/kg in Q3 FY22), owing to higher contribution from ‐added products.

However, Ebitda margins were under pressure on account of higher other expenses as % sales which came in at 11.5% in Q3 FY23 versus 9.9% in Q3 FY22.  

Apollo Pipes reiterated their three‐year vision to grow revenue by more than 30%‐35% compound annual growth rate. In order to cater the growing demand, Apollo Pipes will expand their capacities in North and set‐up new lines for ‐added products and increase their footprints in domestic markets. The focus on increasing the contribution of ‐added products will enable the company to improve their profitability.

Additionally, company is expanding their product portfolio to 2,500 plus units from current 1,500 plus.

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