APL Apollo Tubes (533758) Q4 17/18 earnings summary

Executive summary

• FY18 consolidated revenue rose 25% YoY to ₹5,472 crore; PAT increased 4% to ₹158 crore, while sales volume grew 21% to 1.13 million tonnes.

• Growth was supported by value-added hollow sections, customized products, broader distribution and six commissioned Direct Forming Technology (DFT) lines.

Financial highlights

• Consolidated revenue was ₹5,472.38 crore vs ₹4,377.65 crore; PBT reached ₹244.34 crore vs ₹216.01 crore and PAT ₹158.13 crore vs ₹152.11 crore.

• Consolidated EBITDA was ₹379 crore, up 12% YoY; prior-year EBITDA was restated under Ind AS, with a one-time adjustment from the transition.

• Consolidated EPS was ₹66.84 basic and ₹65.63 diluted, vs ₹64.65 and ₹63.25, respectively.

• FY18 sales volume reached 1,130,305 tonnes, up 21%; production excluding trading and scrap rose 18.5% to 1,111,414 tonnes.

• FY18 PAT growth was moderated by normalization of the effective tax rate to 35% from 30%; FY17 tax benefited from an investment allowance.

Outlook and guidance

• Two additional DFT lines were planned at Sikandrabad and Hosur in H1 FY19; all eight lines are expected to support installed capacity of 2 million MTPA.

• Target utilization is 85–90% of current 1.75 million MTPA capacity before considering further capex.

• FY19 began strongly, with robust sales volumes in April and May; plans include deeper distribution, new territories, OEMs and exports.

• Focus areas include higher value-added products, niche segments, cost efficiency, branding and customer service to sustain growth and improve margins.