APLAPOLLO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.8

Here’s a detailed analysis of APL Apollo Tubes Ltd (APLAPOLLO)

🧾 Core Financials

Revenue & Profit Growth

FY25 revenue rose 14.22% to ₹19,996 Cr, while annual PAT grew 3.36% to ₹757 Cr

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Q4 PAT surged 71.97% YoY to ₹293 Cr, but recent quarterly PAT dipped to ₹116 Cr, showing volatility.

Profitability Ratios

ROCE: 14.7% and ROE: 10.7% — moderate efficiency, slightly below top-tier industrial peers.

EPS: ₹12.9 — decent but not exceptional given the valuation.

Debt & Liquidity

Debt-to-equity: 0.22 — low leverage, with interest expenses

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<1% of operating revenues.

Cash Conversion Ratio: 87.77% — strong working capital efficiency

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📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 132 24.0 Extremely overvalued

P/B Ratio ~15.3 ~3.5 High premium to book value

PEG Ratio -9.69 ~1 Negative due to erratic growth

Intrinsic Value ~₹1,300–₹1,450 — Overpriced vs fundamentals

The valuation is stretched, driven more by growth optimism than earnings support.

🏢 Business Model & Competitive Edge

Core Operations: India’s largest manufacturer of structural steel tubes.

Strengths

Dominant market share with a wide distribution network.

Strong presence in value-added products like pre-galvanized tubes and roofing solutions.

Benefiting from infrastructure tailwinds (Smart Cities, Bharatmala, NIP)

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Risks

High valuation and recent profit dip.

PEG ratio and P/E suggest limited upside unless earnings accelerate.

📉 Technical & Entry Zone

Current Price: ₹1,701

DMA 50/200: ₹1,665 / ₹1,626 — trading above key averages.

RSI: 59.4 — neutral zone.

MACD: 17.4 — bullish momentum.

Suggested Entry Zone: ₹1,450–₹1,600 range, ideally near DMA 200 or ₹1,400 support.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for exposure to infrastructure-led growth.

Avoid fresh entry at current levels unless valuation cools.

Ideal for long-term only if

Revenue CAGR sustains above 15% as projected

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Valuation normalizes below P/E 60 and PEG < 2.

Would you like a discounted cash flow model or a comparison with Tata Steel and Jindal Steel?

Sources

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blog.marketmilestone.in

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