APLAPOLLO - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental & Valuation Analysis

APL Apollo Tubes Ltd is India’s largest structural steel tube manufacturer, with strong market leadership and consistent growth. However, current valuations and technical weakness suggest caution for fresh entry.

🔍 Key Metrics

Metric Value Interpretation

ROE 19.4% Strong profitability

ROCE 22.8% Excellent capital efficiency

PEG Ratio 7.58 Significantly overvalued for growth

Dividend Yield 0.36% Low income generation

Debt-to-Equity 0.15 Healthy balance sheet

P/E Ratio 52.5 Expensive vs industry PE of 23.8

Price-to-Book ~10.0 Rich valuation on book basis

📈 Growth & Profitability

EPS: ₹28.9 — solid earnings base

PAT Growth: ₹237 Cr vs ₹293 Cr — slight dip, but YoY growth is 23%

1

Revenue: ₹5,169 Cr in Q1FY26 — up 3.9% YoY

1

Sales Volume: 7.94 lakh tonnes — up 10% YoY

1

📉 Technical & Trend Analysis

Current Price: ₹1,515

RSI: 25.7 — oversold zone, potential reversal

MACD: -55.0 — bearish momentum

DMA 50/200: ₹1,704 / ₹1,620 — trading below both

Volume: Below average — weak buying interest

📌 Ideal Entry Price Zone

Support Levels: ₹1,486 and ₹1,428

2

Fair Entry Range: ₹1,450–₹1,520

Below ₹1,500 offers better margin of safety

Avoid entry above ₹1,650 unless trend reversal confirmed

🧭 Exit Strategy & Holding Period

If you already hold the stock

✅ Hold If

You believe in India’s infrastructure and housing boom

You trust management’s capacity expansion to 6.8M tons by FY28

You’re comfortable with premium valuation for market leadership

🚪 Exit Strategy

Short-Term Exit: If price rallies near ₹1,850–₹1,900 without earnings support

3

Hold Period: 3–5 years to benefit from volume growth and margin expansion

Re-evaluate: If ROE drops below 15% or PEG remains above 5 for 2+ quarters

🧠 Final Verdict

APL Apollo is a high-quality structural steel play with strong fundamentals, low debt, and dominant market share. However, the PEG ratio and valuation multiples are stretched, and technical indicators suggest short-term weakness. Ideal for long-term investors who can tolerate volatility and wait for earnings to catch up with price.

Would you like a peer comparison with Tata Steel or Jindal Steel to explore alternatives in the metal space?

1

bing.com

2

www.moneycontrol.com

3

dailybulls.in

Edit in a page