APL Apollo Tubes (533758) Q4 12/13 earnings summary

Executive summary

• FY13 net sales rose 44% YoY to ₹20,082.83 million and PAT increased 40% to ₹686.43 million amid decadal-low Indian economic growth.

• Leadership in ERW steel tubes supported by 600,000 TPA capacity, five manufacturing locations, 300+ product varieties and exports to 35+ countries.

Financial highlights

• Gross sales increased 46% YoY to ₹22,471.22 million; EBITDA rose 39% to ₹1,612 million and cash profit rose 39% to ₹812 million.

• Consolidated PAT was ₹686.43 million vs ₹490.55 million; consolidated EPS was ₹31.48 basic and ₹29.95 diluted.

• Standalone net sales reached ₹16,091.18 million vs ₹10,775.33 million; standalone PAT was ₹346.55 million vs ₹287.52 million.

• Production reached a record ~464,000 tonnes vs 287,000 tonnes; capacity utilization was 85%.

Outlook and guidance

• FY14 capacity target: 800,000 TPA, including ~200,000 TPA of brownfield additions; target 1 MTPA by 2015, funded from accruals and a prudent debt mix.

• Management expected FY14 momentum of at least 30%, supported by 33% planned production-capacity growth, wider distribution and new products.

• Plans included doubling in-house coil galvanizing capacity to grow higher-margin pre-galvanized tubes and expanding dealer and warehouse networks for Tier-II and rural demand.

• Long-term targets included US$1 billion revenue and 1 MTPA capacity by 2015.