APL Apollo Tubes Limited has informed the Exchange about Transcript
APLAPOLLO · price
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APL Apollo's Q1 FY26 sales volume came in at 794,000 tons (vs 850,000 tons in Q4 FY25), missing internal targets by about 5% due to macro slowdown, India-Pakistan tensions, early monsoon onset, and weaker money supply hurting dealer buying power. EBITDA per ton dropped Rs. 250 quarter-on-quarter, with Rs. 100 attributed to a one-time notional ESOP cost of Rs. 6 crore and the rest to negative operating leverage. Management cut its full-year volume growth guidance from 15-20% to 10-15%, but reiterated EBITDA spread guidance of Rs. 4,600-5,000 per ton (vs below Rs. 4,000 in FY25), supported by value-added mix improvement (61% of sales) and a brand-premium strategy started in January 2025. The company plans to expand capacity from 4.5-5 million tons to 7 million tons over 2-3 years, adding new plants in Eastern India, South India, Dubai (expansion), Bhuj (export-focused), plus 500,000 tons of coated capacity and 100,000 tons of heavy structural tubes. It remains net cash with single-digit working capital days, and outlined a capital allocation framework: ~25% capex, ~25% shareholder rewards (dividend/buyback), ~25% buffer/liability reduction, with a goal to be totally liability-free.
Near-term: revised volume guidance and weak H1 print may pressure the stock in the short term, but margin trajectory remains positive with EBITDA per ton headed higher. Medium-term: capacity expansion to 7 million tons by FY28 and 70-75% value-added mix support structural growth, while surplus cash positions the company for higher dividends or buybacks. H2 FY26 is expected to be significantly stronger as monsoon ends and government spending feeds through.