Apl Apollo Tubes Share price: Margin beat; Strong volume growth ahead II IDBI Capital raises price target Rs 1149
APL Apollo Tubes reported better than expected profitability for Q3 FY21 as its EBITDA was 27% higher than our estimate. The EBITDA/tonne at Rs4,780 (+43% YoY) was a strong beat and was led by better product mix and scarcity of raw material (steel)/ tubes. APL Apollo’s EBITDA jumped 45% YoY to Rs2.3 bn. Higher operating cash flow for 9M FY21 at Rs 8.5 bn (Rs 5.1 bn in FY20) and fall in net working capital days to 8 days by Q3 FY21 led to net debt falling to Rs 2 bn by Q3 FY21 from Rs 8 bn in FY20.
IDBI Capital raised their FY21 EBITDA estimate for FY21 by 14% given a strong margin beat in Q3 FY21. Even for FY22/FY23, IDBI Capital raises their EBITDA estimates by 17%/16%: Image taken from company's website