Broker’s call: APL Apollo Tubes (Add)

Target: ₹2,475

CMP: ₹2,191.55

APL Apollo Tubes (APAT), leader in the structural tubes market, is doubling capacity to 10mt by FY30E and pivoting towards value-added segments.

This shift is powered by relentless innovation and portfolio reinvention while maintaining 5,000+ SKUs—a move that seeks to\ balance premium positioning with mass-market reach.

These efforts are also culminating in structural moats that reinforce returns, with scale of sourcing and distribution strength driving sustained pricing power and superior capital efficiency.

The company has demonstrated strong working capital discipline, with the adoption of a cash-and-carry model in 2020 structurally reducing receivable days and specialisation by plant improving inventory turns.

APAT remains a net-cash company with incremental capex to be funded via internal accruals, ensuring no strain on the balance sheet and supporting a strong returns profile

All in all, we are initiating coverage at Add with a TP ₹2,475 basedon 36x Mar’28E EPS (in line with last five-year average).

We model in an EBTIDA CAGR of over 20 per cent over FY26–28E (largely mirroring its historical growth trajectory), aided by operating leverage and cost efficiencies. Improving profitability and a strong net cash balance sheet shall keep return ratios at above 25% over coming years.

The stock has run up over 30 per cent over the past six months.

Key risks include volatility in HRC prices, heightened competitive intensity and economic slowdown.

Published on February 23, 2026