Despite solid volume growth, inventory loss hits Apollo Tubes
Going forward, earnings may rise sustainably, led by structural volume growth drivers and a potential margin rise, says report by Sharekhan by BNP Paribas
APL Apollo Tubes Ltd reported Q1 FY24 results that did not meet Sharekhan by BNP Paribas' projections. Due to inventory loss and channel destocking, there was an 8 per cent discrepancy in the EBITDA margin, which stood at Rs 4,645 / tonne (a decline of 6.5 per cent q-o-q).
The consolidated operating profit and PAT(profit after tax) were Rs. 307 crore and Rs 194 crore, respectively, reflecting a 5 per cent and 4 per cent q-o-q drop. These figures were 8 per cent and 7 per cent less than an expected Rs 332 crore and Rs 208 crore. Management highlighted that without the inventory loss, the EBITDA would have been in the range of Rs 375-380 crore, indicating a 14-16 per cent q-o-q surge.
Going forward, earnings may rise sustainably, led by structural volume growth drivers and a potential margin rise, says a report by Sharekhan by BNP Paribas.