Apollo Pipes Q2 Results Review - Outperformance To Continue: Yes Securities

We expect company’s volume and revenue growth to come in at 20% and 22% respectively over FY22‐FY24E.

<div class="paragraphs"><p>Apollo Pipes Ltd. (Source: Company website)</p></div>
Apollo Pipes Ltd. (Source: Company website)

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Yes Securities Report

Apollo Pipes Ltd. reported decent volume growth of 6.5% YoY and 7% QoQ to 15,465 tonne (three‐year compound annual growth rate 14%). However, decline in average selling price from Rs 143/Rs 152 in Q2 FY22/Q1 FY23 respectively to Rs 134/kg lead to a revenue decline of 5%QoQ and remained flattish YoY to Rs 2.07 billion.

H1 FY23 volumes stood at 29,871 tonne, reporting a 20%YoY growth and revenue increased by 23% YoY to Rs 4.26 billion. During the quarter continuous fall in PVC resin prices resulted into inventory loss of Rs 150‐200 million which impacted the profitability of the company.

Hence Ebitda/kg stood at Rs 2 versus Rs 18/Rs 14 in Q2 FY22/Q1 FY23 respectively. H1 FY23 Ebitda/kg came in at Rs 8 as compared to Rs 17 in H1 FY22.

Apollo Pipes' channel inventory continued to remain at lower levels as dealers resorted to de‐stocking on account of constant fall in PVC prices. During the quarter building materials constituted 55% of the revenue and value‐added products share stood at 60%.

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Yes Securities Apollo Pipes Q2FY23.pdf


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