Buy APL Apollo Tubes, target price Rs 2226: HDFC Securities

HDFC Securities has buy call on APL Apollo Tubes with a target price of Rs 2226. The current market price of APL Apollo Tubes Ltd. is Rs 1869.9.

Time period given by analyst is one year when APL Apollo Tubes 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 23165.09 Crore) operating in Metals - Ferrous sector.


Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 2544.51 Crore, down -2.12 % from last quarter Total Income of Rs 2599.61 Crore and up 128.27 % from last year same quarter Total Income of Rs 1114.68 Crore. Company reported net profit after tax of Rs 168.42 Crore in latest quarter.

Investment Rationale
The brokerage expects APL’s revenue/PAT to grow at CAGRs 20%/34% over FY21-24E, led by healthy volume growth, margin expansion, reduced working capital, and reduced debt. It thereby initiates coverage with a BUY rating and a TP of INR2,226/share (based on 35x FY24E EPS). The multiple of 35x is based on the APL’s superior performance, operational efficiency and strong positive outlook going ahead.