India: APL Apollo Q4FY’22 performance at a glance

India’s leading structural steel tubes manufacturer, APL Apollo Tubes Limited, recently announced plans to increase its total capex to INR 6.5 billion, from internal cash flows in FY23-24, SteelMint learnt from the company’s investors call held today.

Highlights:

• The residual capex of APL Apollo’s Raipur plant is INR 3 billion.
• The company is planning to increase the number of infrastructure projects in Kolkata and Dubai at an investment of INR 1.5 billion.
• Addition of the galvanised line to improve efficiency, which will help to reduce the current zinc consumption capacity of 12 to 13 kgs by up to 4 kg per steel tube tonne. The company will achieve this by value-addition and cost control.

The structural steel tubes market is expected to be at 16 mnt by CY25, said Anubhav Gupta, Chief Strategy Officer, during the company’s Q4FY22 earnings call held today.
Furthermore, top steel producer has signed an MoU with APL Apollo tubes for supplying 15 lakh tonnes of HR coils in FY23.

Other highlights:

• Q4FY22 sales up y-o-y: The company’s sales volume was recorded at 551,723 tonnes (t), up 27% y-o-y against the same period last year, and the same went up by 37% compared to the last quarter.
• EBITDA per tonne margin up y-o-y: The company registered a growth in EBITDA per tonne margin by 30% to INR 5,386/t in FY22 against last year. The same edged up by 2% to INR 4,823/t on q-o-q basis.

The company is planning to achieve EBITDA per tonne margin of INR 6,000-7,000/t by value-addition over a period of three to four years from INR 5,200-5,300/t in FY22.

Update on projects:

• The company will spend more on value-addition at its largest plant at Raipur (1.5 mnt capacity) which will be commenced by H1FY23 with a total investment of INR 8 to 9 billion. Also, it is planning to expand the capacity of Raipur works to 4 mnt in the upcoming years.
• An investment with its largest distributor, Shankara Building Products, was made to boost the sales growth in southern India. The company is expecting to achieve 2.5 lakh tonnes of secured sales volume from Shankara with better pricing policy.