Apollo Pipes Ltd
(NSE:APOLLOPIPE)
₹
512.75
+4.7 (+0.93%)
Market Cap: 22.52 Bil
Enterprise Value: 23.67 Bil
PE Ratio: 0
PB Ratio: 2.75
GF Score: 78/100 
Q1 2027 Apollo Pipes Ltd Earnings Call Transcript
Jul 31, 2026 / 07:30AM GMT
Release Date Price:
₹515.6
(+3.98%)
Key Points
Positve
- Apollo Pipes Ltd (BOM:531761) maintained flattish total sales year-over-year despite a challenging quarter with extreme PVC resin price volatility, indicating resilience and market share gains as smaller players faced disruptions.
- The company's normalized business EBITDA margin was 7% on a consolidated basis, with Apollo standalone at 8% and Kisan at 6%, demonstrating underlying profitability excluding one-off inventory write-downs.
- Management is confident of achieving high double-digit volume growth for FY2027, with Q2 expected to show double-digit growth year-over-year and a stronger second half driven by post-monsoon construction activity.
- The newly commissioned Varanasi plant and the ramping up of the Maharashtra plant are expected to support volume growth, with Varanasi targeting 30% capacity utilization in FY2027 and scaling up to 70% by FY2028.
- The company is focusing on working capital efficiency, targeting a reduction in net working capital days from 45 to 30, with initiatives to improve inventory churn and debtor days, which could release funds and improve cash flow.
- The CPVC portfolio grew year-over-year in Q1 despite flattish overall growth, and the tie-up with group resources is showing positive results, positioning it as a major contributor to future growth.
- The company has a clear long-term strategy to achieve INR 5,000 crore revenue by FY31 with a 25% ROCE, funded primarily through internal cash flows, with no immediate need for external debt or equity for ongoing capex.
- The window profile business is ramping up and is expected to contribute 7-8% of revenue in FY2027, with potential to reach 10% as capacity utilization improves, adding a new growth vertical.
- The implementation of Minimum Import Price (MIP) on PVC resin has created a price floor, providing stability and reducing the risk of further sharp price declines, which should support margins and channel partner confidence.
- The company has identified land for a new plant in South India, which would complete its national footprint and provide a significant growth opportunity once the Varanasi and Maharashtra plants are fully ramped up.
Negative
- Apollo Pipes Ltd (BOM:531761) experienced a soft start to FY2027 due to geopolitical disruptions and extreme volatility in PVC resin prices, which fell by INR 32/kg in April, INR 30/kg in May, and a further INR 5/kg in June, impacting overall performance.
- Consolidated EBITDA was negatively impacted by inventory write-downs, aggressive pricing, and fixed expenses related to new business verticals, leading to lower reported profitability.
- Primary and secondary demand in April was severely affected by the 30% price drop in the first 20 days, leading to a flattish volume performance year-over-year for the quarter.
- The Kisan standalone business continues to face challenges, with operating losses and flattish volumes of around 5,500 tonnes per quarter, although there was a slight improvement to 7,000 tonnes in Q4.
- Government infrastructure business, including OPVC and SDP segments, has been almost zero, acting as a major drag on overall volume growth and offsetting gains in other product categories.
- Channel partners and distributors are cautious about restocking due to recent PVC price volatility, which could delay the expected demand recovery and sales momentum in Q2.
- The company's margin guidance of 7-8% EBITDA is dependent on market stability and operational leverage, with any further price volatility or competitive intensity potentially hindering margin expansion.
- The Varanasi plant ramp-up has been slower than expected due to the adverse industry scenario, with Q1 not being a reliable barometer, and the plant is only expected to reach 30% utilization in FY2027.
- The proposed amalgamation with Kisan is expected to yield only around 1% cost synergies, which is relatively modest and may not significantly boost profitability in the near term.
- The company faces ongoing uncertainty regarding the timing of government fund disbursements for programs like Nal Se Jal, which could delay the recovery in the infrastructure segment and impact overall demand.
Operator
Welcome to the Apollo Pipes Q1 FY2027 Earnings Conference Call hosted by Dam Capital.
(Operator Instructions) Mr. Aasim from Dam Capital.
Aasim Bharde
DAM Capital Advisors Limited - Senior Vice President of Equity Research
Thank you, Shruti, and good afternoon to everyone. It's our pleasure to welcome you all on Apollo Pipes' Q1 FY2027 earnings call. we have the leadership team of Apollo Pipes with us, who will take us through the quarterly results, and then we can open up to questions, pose the management team's comments. I now hand the call to Mr. Sameer Gupta, Chairman and Managing Director. Over to you, Mr. Gupta.
Sameer Gupta
Apollo Pipes Ltd - Managing Director, Director
Thank you. Good afternoon, everyone. This is Sameer Gupta. I have joined today with Mr. Arun Agrawal, JMD, Mr. AK Jain, CFO, Mr. Anubhar Gupta, Group CSO. I would like to extend a warm welcome to all of you to our Q1 FY2027 earnings call. The start of FY2027 has been soft as geopolitical situation continued to disrupt global supply
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