APL Apollo Tubes gains 3%, hits 52-week high on strong Q3 sales volume

The company registered a strong sales volume of 480,225 MTPA in Q3FY20, higher by 52.6 per cent YoY, from 314,707 MTPA logged in Q3FY19.

Shares of APL Apollo Tubes hit a 52-week high of Rs 1,939, up 3 per cent, on the BSE on Wednesday after the company reported a strong 53 per cent year on year (YoY) jump in sales volume in October – December quarter (Q3FY20).

"The company registered a strong sales volume of 480,225 million tonne per annum (MTPA) in Q3FY20, higher by 52.6 per cent YoY from 314,707 MTPA in Q3FY19. The growth was led by strong demand across product categories,” APL Apollo Tubes said in a press release. READ STATEMENT HERE

The company is engaged in branded building material steel products. It operates 11 manufacturing facilities with a total capacity of 2.55 million MTPA.

Since November 8, the stock has outperformed the market by surging 35 per cent after reporting healthy volume growth of 20 per cent during July-September quarter (Q2FY20) led by robust demand in the hollow sections segment, DFT pipes, pre-galvanized tubes (GP) among others. In comparison, the S&P BSE Sensex was up 2 per cent during the same period.

The company’s net revenue, however, decreased by 2 per cent YoY to Rs 1,652 crore, while Ebitda (earnings before interest, tax, depreciation and amortization) declined 12 per cent to Rs 76 crore during the quarter.

Going forward, with focused branding approach and innovative product portfolio, the management believes, the company is well positioned to benefit from the recovery in the operating environment and looks forward to delivering healthy results in the upcoming quarters.

The management also expects the company’s profitability to improve Q3FY20 onwards. Overall, the company remains confident of delivering a sales volume growth of 20 per cent CAGR in FY20 & FY21.