Apollo Pipes Q3 PAT rises 25% to Rs 7 cr

Shares of Apollo Pipes rose 2.81% to Rs 410.20 after standalone net profit rose 25.1% to Rs 6.67 crore in Q3 December 2019 (Q3 FY20) as against net profit of Rs 5.33 crore in Q3 December 2018 (Q3 FY19).

Net sales rose 14.9% year-on-year (YoY) to Rs 100.02 crore in Q3 FY20. The Q3 numbers were disclosed after market hours yesterday, 4 February 2020.

Profit before tax jumped 12.3% to Rs 8.48 crore in Q3 FY20 as compared to Rs 7.55 crore posted in Q3 FY19. Current tax expenses, for the quarter, also witnessed a 21.9% fall to Rs 1.53 crore in Q3 FY20 as against Rs 1.96 crore in Q3 FY19.

Sales volume, during the quarter, improved 15% to 10,712 tons in Q3 FY20 from 9,300 tons in Q3 FY19. EBITDA grew 25% to Rs 10.70 crore in Q3 December 2019 compared to Rs 8.5 crore in Q3 FY19.

Commenting on the firm's performance, Sameer Gupta, the managing director of Apollo Pipes, has said that, We have delivered an encouraging set of results during quarter despite facing subdued demand conditions and weak market sentiments. In the quarter, volumes stood healthy at 10,712 MTPA, higher by 15% YoY. This volume performance was driven by improving contribution across product categories including value-added product segments.

On the operational front, I am happy to share that we have successfully integrated the recently acquired plant at Bengaluru in our business operations. The plant, with a capacity of 12,000 MTPA, has started contributing to performance from January 2020 onwards. In addition, the utilization levels at our existing plants at Dadri and Ahmedabad are also steadily improving and we remain confident of further improving it in the quarters ahead.

I am also pleased to share that we have launched a brand-new segment of 'PVC Solvent Cements' during the quarter. This new segment has received a positive response from the market and it is our endeavour to steadily gain market share in this category. In addition, we are also planning to launch products to provide water storage solutions in the coming fiscal. Our growth strategy continues to be towards improving products offering across the value-added chain that will help drive enhanced business visibility and profitability going ahead.

On the whole, we believe, launch of value-added products, improved distribution network, enhanced branding activities and ramp-up in utilization at facilities will significantly enhance productivity and improve business efficiency for Apollo Pipes in the medium to longer term. To conclude, we remain optimistic of delivering a sales volume growth of over 25% CAGR over the next 3 years, he added.

APL Apollo Tubes is engaged in the business of production of electric resistance welded (ERW) steel tubes. The firm manufactures black pipe, galvanized pipe, pre-galvanized pipe and coils.

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