Synopsis:
APL Apollo Tubes is in focus as Motilal Oswal expects the stock to rise by another 32 percent from its current level, citing
With a market capitalization of 42,211 crore, the shares of APL Apollo Tubes Ltd are currently trading at Rs 1,521 per share, down by 21 percent from its 52-week high of Rs 1,936 per share. Over the past five years, the stock has delivered an impressive return of 723 percent.
Leading brokerage house, Motilal Oswal, has assigned a Buy call on the stock with a target price of Rs 2,000 per share, signalling an upside potential of 32 percent from its current market price.
The brokerage cited that APL Apollo has reported a solid performance for Q1 FY26, with EBITDA jumping 23 percent compared to last year, even in the face of challenges like rising employee costs and geopolitical tensions.
This growth was fueled by a 10 percent year-on-year increase in volumes and better margins, with EBITDA per ton reaching Rs 4,683 crore, which is a 12 percent YoY rise. While revenue saw a 4 percent YoY increase to Rs 5,170 crore, it declined by 6 percent from the previous quarter.
The company’s value-added product (VAP) mix has improved to 61 percent, which is a positive sign for profitability. Adjusted PAT also rose by 23 percent YoY, hitting Rs 237 crore.
Management has slightly adjusted its guidance for FY26; now it expects a volume growth of 10–15 percent (down from the previous 15–20 percent) and an EBITDA per ton in the range of Rs 4,600–5,000, which is a bit lower than the earlier target of Rs 5,000.
Additionally, the company has divested its investment in Shankara Building Products, as it no longer sees it as strategically valuable. Looking ahead, APL Apollo aims to grow by entering new markets (specifically in East and South India, as well as Dubai), diversifying its product offerings, boosting exports, and strengthening its brand. A planned capital expenditure of Rs 1,500 crore over the next three years is set to increase total capacity from 4.5 MTPA to 6.8 MTPA by FY28.
Motilal Oswal remains positive about APAT’s growth prospects, driven by a recovery in infrastructure demand across sectors like railways, aviation, and real estate, along with ongoing cost efficiencies and automation. With a growing share of value-added products and expanding capacity, margins are expected to hold steady.
The brokerage now expects APL Apollo Tubes to deliver strong growth ahead, projecting its Revenue, EBITDA, and PAT to grow at a CAGR of 19 percent, 37 percent, and 44 percent respectively, over FY25-28.
Financial Highlights
APL Apollo reported a revenue of Rs 5,170 crore in Q1 FY26, up by 4 percent from Rs 4,974 crore in Q1 FY25. Additionally, the company reported a net profit growth of 23 percent to Rs 237 crore in Q1 FY26 as compared to Rs 193 crore in the same quarter of the previous year.
The stock delivered a ROE and ROCE of 19.38 percent and 22.80 percent respectively, and is currently trading at a P/E of 52.68x as compared to its industry average of 23.43x.
APL Apollo Tubes Ltd stands as the largest manufacturer of structural steel tubes in India, having an impressive annual capacity of 4.3 million tonnes. Based in the Delhi NCR region, the company offers a diverse range of over 2,500 product varieties and has established a strong footprint in 29 cities, while also exporting to 20 countries. With a solid 3-tier distribution network and more than 800 dealers, APL Apollo plays a vital role in supporting India’s infrastructure with its innovative steel solutions.
Written by Satyajeet Mukherjee
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