Capital Goods-Non Electrical Equipment · APAT
Steel - Tubes/Pipes
from 2,223 today
APL Apollo reported soft Q1FY27 volumes due to geopolitical and macro challenges, but management guides to a strong H2FY27 recovery and steady EBITDA/tn, keeping the medium-term growth thesis intact.
We retain our BUY rating on the stock with a revised target price of Rs. 2,325, based on 37x FY28E adjusted earnings per share, supported by optimistic growth prospects, aggressive capacity expansion plans, and improving earnings visibility.
We roll our estimates over to 1HFY29E (from FY28E) and maintain BUY rating with a revised TP of INR 2,285 at a target P/E multiple of 32x 1HFY29E earnings, as pricing power offsets volume loss.
We believe the valuation still looks attractive for long-term investors on the back of growth drivers from sectors such as Construction, Railways, Airports and Solar, increase in Value-added product mix, higher exports, and increasing HRC capacity.
We maintain BUY on APAT with a target price of Rs 2,265/share, based on 25x FY28E EV/EBITDA, implying 17% upside from CMP. Resilient EBITDA/t, improving monthly volumes, capacity additions and a rising share of VAPs reinforce our positive medium-term view.
Ratings and target prices as published by each firm. Each summary condenses that firm's stated view in its own note and is attributed to it; no report text is reproduced.
