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Check Before You Invest : APL Apollo Tubes Ltd

BSE: 533758 NSE: APLAPOLLO ISIN: INE702C01027
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does APL Apollo Tubes Ltd belong to?
APL Apollo Tubes Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is APL Apollo Tubes Ltd a good quality company?
APL Apollo Tubes Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is APL Apollo Tubes Ltd undervalued or overvalued?
APL Apollo Tubes Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 44.98 55.26
Price to Book 10.22 11.47
Price to Sales 2.42 2.38
EV to EBITDA 28.05 33.18
Q.4 Is APL Apollo Tubes Ltd a good buy now?
APL Apollo Tubes Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd revenue growth is 14.2% for FY-2025, which is below its 5-year CAGR of 21.78%, indicating slower growth.

Q.2 Gross Profit margin of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.3% for FY-2025, which is below its 5-year median of 6.1%, indicating decreasing margins.

Q.3 Operating Profit Margin of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.81% for FY-2025, which is below its 5-year median of 6.59% indicating decreasing margins.

Q.4 Net Profit Margin of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Net Profit Margin is 3.66% for FY-2025, is below its 5-year median of 4.04%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 5.3 6.1
Operating Profit Margin (%) 5.81 6.59
Net Profit Margin (%) 3.66 4.04

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Return on Asset is 9.45%, which is below its 5-year historical median of 11.23%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Return on capital employed is 22.9% for FY-2025, which is below its 5-year historical median of 26.88%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Return on equity is 19.41% for FY-2025, which is below its 5-year historical median of 23.51%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Cash conversion cycle is -9 days, below its 5-year historical median of -1 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.76 2.76
ROE (%) 19.41 23.51
ROCE (%) 22.9 26.88
Cash Conversion Cycle -9 days -1 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Debt-to-Equity ratio is 0.15, which is lower the industry average of 0.31, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of APL Apollo Tubes Ltd?
APL Apollo Tubes Ltd Debt to cash flow from operations is 0.51, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of APL Apollo Tubes Ltd?

Q.1 Promoter shareholding and pledge status of APL Apollo Tubes Ltd?
Promoters hold 28.25% of the APL Apollo Tubes Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does APL Apollo Tubes Ltd performance compare with that of its Peers?

Q.1 Revenue growth of APL Apollo Tubes Ltd vs industry peers?
APL Apollo Tubes Ltd revenue CAGR is 21.78%, compared to the industry median CAGR of 21.78%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 14.2 21.8
Gross Profit Growth (%) 0.7 24.3
Operating Profit Growth (%) 0.6 20.2
Net Profit Growth (%) 3.4 24.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.76 1.35
ROE (%) 19.41 20.5
ROCE (%) 22.9 20.97
Cash Conversion Cycle (days) -9.2 26

Valuation & price assessment

Q.1 Stock return of APL Apollo Tubes Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 37.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
37.4% 25% 18.1% 17.4%
Q.2 Valuation ratios of APL Apollo Tubes Ltd vs historical?
The current P/E ratio of 44.98 is lower than its historical median of 55.26, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 44.98 55.26 17.36
Price to Book 10.22 11.47 1.63
Price to Sales 2.42 2.38 0.74
EV to EBITDA 28.05 33.18 10.05

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