APL Apollo Tubes shares surged 6.64% to ₹1,939.50 following the company's strong Q1 FY27 financial results, as reported by Business Standard. This represents a significant turnaround from the previous session's decline of 2.33% to ₹1,849, demonstrating positive market response to the company's robust quarterly performance.
The company delivered exceptional financial results for the quarter ended June 2026, with consolidated net profit rising 10.9% to ₹263.1 crore compared to ₹237.17 crore in the corresponding quarter of the previous year. Net revenue increased 8.5% to ₹5,606.7 crore from ₹5,002.81 crore in Q1 FY26, demonstrating strong operational performance across key metrics. Sales volume for the period was 744,823 ton, down 6% YoY, reflecting challenging market conditions despite revenue growth, as reported by Motilal Oswal. The company faced headwinds from UAE disruptions, weak SG Premium volumes amid higher primary-secondary steel price gaps, energy-related supply issues, and subdued construction demand due to elevated input costs and channel destocking.
The company's operational performance showed significant improvement with EBITDA improving 10.6% YoY to ₹411.3 crore and EBITDA per ton rising 17.9% YoY to ₹5,522 in the June 2026 quarter. Profit before tax stood at ₹352.4 crore, up 13.7% from ₹310 crore in Q1 FY26. Despite negative operating leverage from volume pressures, APAT maintained its EBITDA/MT at ₹5,522 owing to better pricing strategy and higher focus on profitability, as noted by Motilal Oswal. These metrics reflect enhanced operational efficiency and cost management initiatives, with the company's Operating Profit Margin (OPM) expanding to 7.56% from 7.44% in the previous year.
Motilal Oswal has recommended a buy rating on APL Apollo Tubes with a target price of ₹2,240, citing the company's strong fundamentals and growth prospects. The brokerage forecasts revenue/EBITDA/PAT CAGR of 17%/18%/21% over FY26-28 and values the stock at 35x FY28E EPS of ₹63. At current market price, the stock trades at 30.7x FY28E EPS. Sanjay Gupta, Chairman of APL Apollo Tubes, acknowledged that demand for structural steel tubes was soft due to geopolitical situation and challenging macroeconomic environment, but expressed optimism for future performance, noting that "we expect demand conditions to improve in the coming quarters on the back of an improved government budget allocation for the infrastructure sector." The company operates 11 manufacturing facilities with a total capacity of 5 million tons and is positioned to capitalize on expected demand recovery in the second half of FY27.
