APL Apollo Tubes (533758) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 began with a reversal in steel prices, aiding input costs and product affordability, and achieved record sales volume of 721,064 tons, up 9% YoY and 6% QoQ, despite challenging demand conditions.

• Revenue rose to ₹4,974.30 crore (consolidated), up from ₹4,544.90 crore YoY, with EBITDA at ₹3.0bn (+8% QoQ, -2% YoY) and net profit at ₹1.9bn, up 13% QoQ and flat YoY.

• Value-added products contributed 60% to sales volume, with strong growth in heavy structural steel tubes and coated products.

• Raipur plant is entering accelerated production; Dubai facility expansion enhances global presence and export capacity.

• Non-recurring ESOP/SAR expenses and brand campaign costs impacted Q1 EBITDA per ton.

Financial highlights

• Q1 sales volume: 721,000 tons; revenue: ₹49.7bn (+9% YoY, +4% QoQ); EBITDA per ton: ₹4,183 (-10% YoY, +1% QoQ); net profit: ₹1.9bn (flat YoY, +13% QoQ).

• Consolidated EPS for Q1 FY25 was ₹6.96; standalone EPS was ₹3.33.

• Working capital increased to 3-4 days; net debt rose to ₹1.5bn, with near net-debt zero expected for FY25.

• Interest cost: ₹278mn (+3% YoY, -11% QoQ); cash profit: ₹2.4bn (+2% YoY, +10% QoQ).

• ROCE: 24% (vs 29.5% in FY24); ROE: 20.3% (vs 22.2% in FY24).

Outlook and guidance

• FY25 sales volume guidance maintained at 3.2 million tons, with expectations of a stronger H2 post-monsoon and budget allocations.

• Q2 margins expected to remain under pressure due to steel price uncertainty, but multiple levers for margin expansion identified for H2.

• CapEx of INR 500-600 crore planned for three new plants, targeting 5 million ton capacity within 12-15 months.

• Anticipates improved demand from government infrastructure spending and favorable monsoons.

• Surplus cash is expected on the balance sheet from FY26 onwards.