APL Apollo Tubes: Volume softness priced in; margins hold

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APL Apollo Tubes: Volume softness priced in; margins hold

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APL Apollo Tubes

Volume softness priced in; margins hold

Reiterate Rating: BUY | PO: 2,170 INR | Price: 1,829 INR

Volumes down 6% YoY on soft developer/dealer demand 13 July 2026

APAT reported 1QFY27 volumes of 0.74mt, down 6% YoY versus 0.79mt in 1QFY26, as Equity

developer-linked demand remained weak and dealers continued to carry lower-than-

normal inventory. Around 40% of APAT’s sales are linked to developer demand, which Udit Dhekale >>

Research Analyst

has been affected by building-material cost inflation and slower project execution. HRC BofAS India

prices also remained elevated after a sharp rally in 4QFY26, further pressuring channel +91 22 6632 8520 udit.dhekale@bofa.com

appetite.

Margin resilience to cushion earnings

We expect APAT to prioritize profitability over volume in the current environment. We Stock Data

model EBITDA/ton of Rs5,266, up 12% YoY, helped by better mix, premium products and

Price 1,829 INR

lower employee costs. Gross margin is expected to improve 83bps YoY to 16.1%, while

Price Objective 2,170 INR

EBITDA margin rises 77bps YoY to 8.0%. Despite a 6% YoY volume decline, we expect

Date Established 6-Jul-2026

EBITDA to grow 5% YoY and recurring PAT to rise 11% YoY to Rs2.6bn, supported by

Investment Opinion C-1-7

lower interest costs and better unit economics.

52-Week Range 1,492 INR-2,301 INR

Valuations attractive; volume likely to pick up in H2 Mrkt Val / Shares Out (mn) 5,326 USD / 277.7

The stock has underperformed broader indices and peers over the past year, despite Market Value (mn) 507,754 INR

APAT’s medium-term growth and return profile remaining intact. At the current price, Average Daily Value (mn) 16.17 USD

our PO implies 18% upside potential.