Q1 2027 APL Apollo Tubes Ltd Earnings Call Transcript
Key Points
- EBITDA per ton improved by INR1,000 quarter-on-quarter to INR5,500, driven by strong pricing power and brand positioning despite lower volumes.
- Management reaffirmed confidence in achieving over 20% EBITDA growth for FY27, with volume growth of 15-20%.
- July volumes surged 20% month-on-month, indicating a strong recovery and setting a positive tone for Q2.
- Working capital days remain below zero, with cash reserves stable at INR14 billion, reflecting strong balance sheet discipline.
- Capacity expansion plans (2 million tons over 2.5 years) and debottlenecking (1 million tons) will boost value-added product share to 75-80%, enhancing profitability.
- Q1 FY27 volumes fell below expectations at 745,000 tons, impacted by geopolitical issues in UAE (loss of 25,000 tons) and energy crisis in India (loss of 25,000-30,000 tons).
- SG Premium brand volumes declined due to a high price gap with secondary steel, affecting overall volume growth.
- High factory inflation led to softer construction demand, causing destocking by channel partners and delayed purchases by EPC contractors and developers.
- EBITDA per ton is expected to moderate to INR5,000-5,500 range as the company tweaks pricing to regain volumes, potentially impacting margins.
- Employee costs rose due to annual increments and lower production, adding to cost pressures in the quarter.
Ladies and gentlemen, good day, and welcome to the APL Apollo Tubes Limited Q1 FY27 Earnings Conference Call hosted by Antique Stockbroking Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Pallav Agarwal from Antique Stockbroking. Thank you, and over to you, sir.
Yes. Thank you, Lizan, and good morning, everyone. Apologies for the delay in starting the call. So we have the senior management of APL Apollo Tubes represented by Mr. Sanjay Gupta, the Chairman and Managing Director; Mr. Rahul Gupta, Director; Mr. Deepak Goyal, the Director Operations; Mr. Anubhav Gupta, the Chief Strategy Officer; and Mr. Chetan Khandelwal, the Chief Financial Officer.
So I'd now like to hand over the call to Anubhav for his opening remarks. Over to you, Anubhav.
Thanks, Pallav, for hosting Apollo Tubes for its Quarter 1 FY27 Earnings
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