Edelweiss maintains buy on Apar Industries, target price Rs 698

Edelweiss has maintained buy rating on Apar Industries in the long term with a target price of Rs 698. Shares of Apar Industries ended down 1% at Rs 563 on Monday while BSE Sensex closed 1075.41 points up at 39,090.03.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 1967.86 crore, down -19.37 % from last quarter sales of Rs 2440.60 crore and up 31.58 % from last year same quarter sales of Rs 1495.58 crore. The company has reported net profit after tax of Rs 41.24 Crore in latest quarter.

Investment Rationale
The brokerage remains positive on Apar Industries as it is well placed to capitalise on the uptick in T&D with improved product mix leading to a strong 36% compounded annual growth rate in profit after tax over FY19–21. Further, with declining capital intensity and improving profitability, we estimate return on equity to improve 568 bps to 17.5% over FY19-21, said Edelweiss.