ICICI Securities has given Buy recommendation for APL Apollo Tubes recommended buy rating on the stock with a target price of Rs 1180 in its research with a target price of Rs. 1180 in its research report issued on Dec 20, 2021

ICICI Securities research report on APL Apollo Tubes

We visited APL Apollo Tubes’ (APL) Murbad, Maharashtra facility and met with multiple APL distributors. Murbad was Lloyds steel plant, which APL acquired in CY10 for a cash consideration of Rs400mn with a capacity of 90,000te (Link). The same has been ramped up to 0.35mtpa over past seven years, with the introduction of direct forming technology (DFT) and cold rolling and Galva (GP/GI) capacity. We witnessed, firsthand, the increased capacity turns that DFT allows (~8 hours of conventional rolling time to ~1hr of DFT rolling, including HR slitting). Distributors re-iterated the well-known reasons behind APL gaining ~ 50% share in the structural tubes market in India i.e. , i) highest number of SKUs, with fastest turnaround and ii) distribution in pipes evolving to cash and carry through upfront discounting helping APL’s working capital. Maintain BUY.


We maintain BUY with a revised target price of Rs1,180/share. This is based on 25x FY24E P/E (unchanged). The stock has seen a massive rerating in the past 18 months on the back of Tricoat acquisition, repayment of debt and steady growth.

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