APARINDS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 4.4

📊 Core Financials:

- Profitability: PAT stable at 254 Cr. vs 258 Cr. previous quarter, showing consistency despite slight decline.

- Margins: ROCE at 33.3% and ROE at 19.8% highlight strong efficiency and profitability.

- Debt: Debt-to-equity at 0.14 → very low leverage, strong balance sheet.

- EPS: 232 ₹, robust earnings power supporting valuation.

💹 Valuation Indicators:

- P/E: 37.8 vs Industry PE of 30.6 → trading at a premium, but justified by strong returns.

- P/B: 8,767 ₹ / 1,153 ₹ ≈ 7.6, premium valuation.

- PEG Ratio: 0.74 → attractive relative to growth, indicating undervaluation.

- Intrinsic Value: Estimated fair value ~8,200–8,400 ₹, suggesting current price is close to fair value.

🏢 Business Model & Competitive Advantage:

Apar Industries operates in specialty oils, cables, and conductors, serving power and industrial sectors. Competitive advantage lies in diversified product portfolio, strong export presence, and efficient capital utilization. High ROCE and ROE reflect operational excellence and sustainable profitability.

📈 Entry Zone & Long-Term Guidance:

- Entry Zone: Attractive accumulation range between 8,200–8,400 ₹.

- Long-Term Holding: Strong fundamentals, low debt, and sector tailwinds make Apar Industries a solid long-term compounder.

Positive

• High ROCE (33.3%) and ROE (19.8%) indicate strong profitability and efficiency.
• Debt-to-equity at 0.14 → virtually debt-free.
• PEG ratio of 0.74 suggests undervaluation relative to growth prospects.
• DII holdings increased (+0.85%), showing domestic institutional confidence.

Limitation

• P/E ratio (37.8) above industry average (30.6), suggesting premium valuation.
• P/B ratio of 7.6 reflects steep premium valuation.
• Quarterly PAT slightly declined (254 Cr. vs 258 Cr.).
• RSI at 42.1 and MACD (-11.1) reflect weak technical momentum.

Company Negative News

• Minor decline in quarterly PAT.
• FII holdings increased only marginally (+0.18%), showing limited foreign investor confidence.
• Technical indicators (MACD negative, RSI weak) show short-term pressure.

Company Positive News

• Strong fundamentals with high ROCE and ROE.
• DII holdings increased, showing domestic institutional support.
• Debt-free balance sheet enhances financial stability.

Industry

• Power and industrial sector supported by infrastructure growth and electrification demand.
• Industry PE at 30.6 indicates moderate valuation compared to Apar’s premium.
• Sector growth expected with rising demand for cables, conductors, and specialty oils.

Conclusion

⚖️ Apar Industries demonstrates excellent fundamentals with strong ROCE, ROE, and low debt. While valuations are slightly stretched, the PEG ratio and sector tailwinds make it attractive for long-term investors. Accumulation near 8,200–8,400 ₹ is recommended for value-conscious entry, with potential for steady compounding returns in the industrial and power sector.