India’s leading structural steel pipe manufacturer, APL Apollo Tubes Limited, has announced its financial results for the quarter ending 30 September, 2022. The company has posted its highest quarterly sales volume, however, EBITDA margin was lower due to weak sales mix, SteelMint learnt from company’s investors call held on 9 November.
Sales volume up y-o-y: The company’s sales volume was recorded at 602,000 tonnes (t) in Q2FY23, up 41% against the same period last year. On a q-o-q basis, sales rose by 42%.
The company’s sales performance was satisfactory this quarter in the construction sector and the value-added business of steel companies, officials said.
The partnership with Shankara Building Products has proven fruitful for the last six months, with sales up 110% y-o-y.
EBITDA per tonne margin drops y-o-y: EBITDA per tonne dropped by 26% y-o-y to INR 3,850/t in Q2FY23. The same fell by 16% compared to INR 4,587/t in the preceding quarter.
The major reason for the low EBITDA was the weak sales mix of about 40% in Q2 and the low EBIDTA contribution from the Raipur plant, which recorded to be at break-even level.
Furthermore, the company expects to achieve EBITDA per tonne margin of INR 5,000/t in H2FY23.
Market share: The company enjoys a market share of 55%, of which commoditized is 40%, value added is 40% and super value added is 20%.
Update about Raipur plant: Operating cash flow of INR 400 crore was utilised at the Raipur plant, and innovative products are manufactured and well received by fabricators, architects, distributors and retailers across India. In addition, operating capacity of 75,000 t and a significant increase in EBITDA is expected from this plant in Q3FY23.
Environmentally friendly products: The company aims to reduce emissions by 25% and increase the share of renewable energy from 38% to 47% by 2030. To this end, the company plans to consume more than 50% of electricity through renewable energy by 2030 and manufacture environmentally friendly products such as chaukhat, fences, boards and railings under the “Steel for Green” concept, which replaces the traditional use of wood in construction.
Keeping the “Steel for Green” as priority, APL Apollo is the first company to innovate thicker color coated sheets which will save more trees.
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