APL Apollo Tubes (533758) Q4 13/14 earnings summary

Executive summary

• FY2013-14 consolidated gross revenue rose 35% YoY to ₹28,619.48 million; production reached 572,000 tonnes, up 24% YoY, despite sluggish steel demand.

• Consolidated PAT fell to ₹589.79 million from ₹686.43 million as subdued construction and infrastructure demand and a deliberate market-share strategy compressed margins.

Financial highlights

• Consolidated net sales were ₹25,688.55 million versus ₹20,082.83 million; operating EBITDA was ₹1,645.55 million versus ₹1,595.38 million.

• Consolidated PBT before exceptional items and tax was ₹892.33 million versus ₹1,057.76 million; exceptional items were ₹2.63 million versus ₹7.68 million.

• Standalone net sales were ₹20,573.21 million versus ₹16,091.18 million; standalone PAT was ₹261.85 million versus ₹346.55 million.

Outlook and guidance

• Target production run rate of 1 million tonnes by FY2015-16; capacity was 0.8 million tonnes at year-end, with capacity targeted to exceed 1 million tonnes after planned expansion.

• Planned FY2014-15 capex of ₹300–400 million; management expects margins to improve 100–150 bps as demand improves.

• Revenue ambition is US$1 billion within five years; export share target is 25–30% of turnover, versus 5–6% currently.

• New products include colour-coated pipes, in-line galvanised pipes and decorative sections; two new pre-galvanised lines were being commissioned to double capacity in that product.