Apollo Pipes Q4 Results Review - Strong Growth Trajectory To Sustain: Yes Securities

Yes Securities Report

Apollo Pipes Ltd. registered higher quarterly volumes of 18,685 tonne (two-year compound annual growth rate 20%), a growth of 13% YoY and 4% QoQ on account of healthy demand from plumbing segment.

The average selling price came in at Rs 135/kg as compared to Rs 150/Rs 131 in Q4 FY22/Q3 FY23 respectively. With better product mix and no impact of inventory gain/loss, company’s Ebitda/kg stood at Rs 16 in Q4 FY23 versus Rs 17/Rs 9 in Q4 FY22/Q3 FY23 respectively, hence Ebitda margins came in at 11.7% as against 11.5%/6.8% in Q4 FY22/Q3 FY23 respectively.

Management has guided for a stellar revenue growth of 35% CAGR over coming four-years, which will be driven by 28-30% volume growth and 4-5% growth.

Apollo Pipes is focused on expanding their market share across India and hence they are planning a capex of Rs 500 billion, wherein Rs 1 billion will be for brownfield expansion of 25,000 Te (by Q4 FY24) and Rs 4 billion will be for greenfield expansion in West, South and East for setting up 125,000 Te capacity which will come-up in staggered manner.

The capex will be funded via Rs 2.60 billion equity infusion and balance via internal accruals.

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