Apar Industries slips 18% on profit booking posts Q4 results

In past one year, the stock zoomed 341 per cent, as against 14 per cent rise in the S&P BSE Sensex.

Shares of Apar Industries slipped 18 per cent to Rs 2,503 on the BSE in Tuesday’s intra-day trade on profit booking after the company reported a robust 194 per cent year-on-year (YoY) jump in profit after tax (PAT) at Rs 243 crore in March quarter (Q4FY23), on healthy operational income.

At 10:26 AM; the stock quoted 10 per cent lower at Rs 2,749, as compared to 0.36 per cent rise in the S&P BSE Sensex.

The stock price of Apar Industries had hit a record high of Rs 3,296.40 on Monday, May 8. Despite today’s correction, in past one year, the stock has zoomed 341 per cent, as against 14 per cent rise in the benchmark index.

In Q4FY23, the company’s revenue grew by 36 per cent YoY with volume-led growths across all divisions and growth in export of cable and conductor businesses. The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 146 per cent YoY on the back of strong margins in conductor, cable division and revival of oil margins.

Apar Industries is the world's largest conductor manufacturer, 3rd largest transformer oil manufacturer and India's largest renewable cables manufacturer. As the largest aluminium and alloy conductor manufacturer and the 3rd largest transformer oil manufacturer, the company enjoys a leadership position in the global markets. The company has reputed clientele comprising large engineering, procurement and construction (EPC) players and major utilities like railways, defence and marine.

In Q4FY23, the company’s conductors segment reported revenue growth of 67 per cent YoY led by volume growth on the back of higher share of premium products and exports.

In Q4FY23, EBITDA per MT at Rs 44,114 at historic high levels on the back of improved mix of premium products, higher conventional export margin and low cost of logistics, steel and Aluminium premium. Favourable market conditions post Covid also added to the margins as customers paid a premium for reliable delivery, the company said. The company has robust order book position at Rs 5,124 crore in conductors segment as on March 31, 2023.

ICRA have ‘stable’ outlook on the Apar Industries’ long-term rating as the rating agency believe that the company’s revenues and accruals will be supported by its comfortable order book benefiting from its strong market position in conductors and specialty oil segment along with expectations of a healthy order inflow with focus on premium products in the near to medium term.

Further, favourable demand prospects for transmission and distribution products in domestic market as well as increased order intake internationally where sizeable capex is in infrastructure and power sector is expected to provide further growth opportunities to the company, ICRA said in its rationale.