India’s leading structural steel tubes manufacturer, APL Apollo Tubes Limited, has set FY’25 sales volume guidance at 4 mnt, SteelMint learnt from the company’s investors call held today. Also, it plans to increase total capex to INR 6.5 billion, from internal cash flows in FY23-24.
The company’s long-term strategy focuses on capex for value-added products, innovation, market creation, and enhancement of distribution.
Highlights:
- Value-added sales mix was around 60-65% in Q1, and it is expected to improve further after commencement of the plant at Raipur.
- Raipur plant: The company aims to launch innovative products, which will solve industry problems. The product profile comprises of 3 categories – colour-coated tubes, heavy structural tubes, colour-coated sheets. Moreover, the Raipur plant is expected to start operations from Q3FY’23.
Other highlights:
- Sales volume up y-o-y: The company’s sales volume was recorded at 423,000 tonnes (t), up 13% y-o-y against the same period last year; however, sales declined by 23% q-o-q compared with the previous quarter.
- EBITDA per tonne margin up y-o-y: The company’s EBITDA per tonne margin dropped by 33% y-o-y to INR 4,587/t in Q1FY’23 against last year.
The company has maintained a cycle of 15 days for raw materials.
It expects to achieve EBITDA per tonne margin of INR 6,000-8,000/t for its Raipur project.
Around 70-75% of capex is completed and the rest will be completed in next 2-3 months.
Update on projects: The company aims to expand its business in Dubai and Kolkata.
- Dubai: Land has been identified and has also finalised the agreement with authorities.
- Kolkata: Land has been identified, agreement is yet to be closed.
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