Buy APL Apollo Tubes, target price Rs 1630: Axis Securities

Axis Securities has buy call on APL Apollo Tubes with a target price of Rs 1630. The current market price of APL Apollo Tubes is Rs 1460.85. Time period given by analyst is year when APL Apollo Tubes price can reach defined target.

APL Apollo Tubes, incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 41096.27 Crore) operating in Metals - Ferrous sector.

APL Apollo Tubes key Products/Revenue Segments include Pipes & Tubes Steel, Scrap and Export Incentives for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2023, the company has reported a Consolidated Total Income of Rs 4566.57 Crore, up 2.64 % from last quarter Total Income of Rs 4449.05 Crore and up 32.48 % from last year same quarter Total Income of Rs 3446.87 Crore. Company has reported net profit after tax of Rs 193.62 Crore in latest quarter.

Investment Rationale
The brokerage increases its sales volume estimates and EBITDA for FY25 by 4%/3% and roll forward its valuation at 32x PE of Jun’25 EPS (From Mar’25E). The brokerage maintains its BUY rating on the stock.
The brokerage raises its P/E from 31x to 32x on a good demand outlook. Post the recent rally, the stock is currently trading at a consensus 12M forward P/E of 39x which looks stretched.

Promoter/FII Holdings
Promoters held 30.62 per cent stake in the company as of 30-Jun-2023, while FIIs owned 25.07 per cent, DIIs 12.7 per cent.