APL Apollo Tubes (533758) Q4 14/15 earnings summary

Executive summary

• FY15 consolidated net revenue rose 20.7% YoY to ₹30,137.77 million; sales volume increased 22% to 709,600 tonnes despite a difficult steel market.

• Capacity reached 1.05 million tonnes across six plants; product range exceeded 400, with colour-coated pipes and patented steel door frames among new launches.

Financial highlights

• Consolidated EBITDA was ₹1,862 million, with a 6.2% margin; PAT was ₹637.56 million and EPS ₹27.20, versus ₹589.79 million and ₹25.63 in FY14.

• Consolidated gross sales increased to ₹33,572.34 million from ₹27,900.48 million; net revenue rose to ₹30,137.77 million from ₹24,969.55 million.

• Standalone PAT was ₹314.53 million versus ₹261.85 million; standalone EPS was ₹13.42 versus ₹11.38.

• Inventory carrying losses of ₹450 million weighed on FY15 EBITDA and margins amid falling HR coil prices and a 30–40-day inventory cycle.

Outlook and guidance

• FY16 topline growth target was 25%; management expected demand momentum to continue and aimed to improve margins and return ratios.

• Capacity target: over 2 million tonnes in 3–4 years, with ₹4 billion planned capex; FY16 capacity additions of 150,000 tonnes and 200,000–250,000 tonnes of higher-size lines over three years were outlined.

• FY16 capex was estimated at ₹800–1,000 million, primarily by reconfiguring existing mills; management expected internal accruals to fund expansion without new long-term debt.

• Long-term goals included 20% domestic market share, double-digit operating margins and US$1 billion revenue within 3–4 years.