Buy APL Apollo Tubes, target price Rs 1180: ICICI Securities

ICICI Securities has buy call on APL Apollo Tubes with a target price of Rs 1180. The current market price of APL Apollo Tubes Ltd. is Rs 1064.3.

Time period given by analyst is one year when APL Apollo Tubes Ltd. price can reach defined target.

APL Apollo Tubes Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 26504.18 Crore) operating in Metals - Ferrous sector.


APL Apollo Tubes Ltd. key Products/Revenue Segments include Pipes & Tubes Steel, Scrap and Export Incentives for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 3095.28 Crore, up 21.65 % from last quarter Total Income of Rs 2544.51 Crore and up 39.92 % from last year same quarter Total Income of Rs 2212.14 Crore. Company reported net profit after tax of Rs 146.07 Crore in latest quarter.

Investment Rationale
The brokerage maintains BUY with a revised target price of Rs1,180/share. This is based on 25x FY24E P/E (unchanged). The stock has seen a massive rerating in the past 18 months on the back of Tricoat acquisition, repayment of debt and steady growth. With an improving RoE and RoCE profile (significantly higher operating leverage), higher growth driven by constant efforts towards market creation, and steady increase in market share it believes that a multiple of 25x FY24E P/E is justified.

Promoter/FII Holdings
Promoters held 36.84 per cent stake in the company as of 30-Sep-2021, while FIIs owned 25.24 per cent, DIIs 8.42 per cent.