APL Apollo fires on all cylinders; what's next for the stock? Find out here

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India's largest manufacturer of structural steel tubes and pipes, APL Apollo Tubes, reported a strong September quarter of financial year 2025 (Q2FY26) performance, beating estimates on profitability, aided by a richer product mix and better operating leverage. 

 

The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) per tonne stood at ₹5,228 against Nuvama’s estimate of ₹4,900, driven by improved gross margins, higher value-added product contribution, and lower Employee Stock Option Plan (ESOP) costs.

 

Analysts at Nuvama noted that APL Apollo launched its new ‘SG Premium’ product line at around ₹49,500 per tonne to counter competition from secondary steel players. Utilisation levels improved across key facilities, with Raipur and Dubai operating at 65 per cent and 80 per cent, respectively, during the quarter.

Robust outlook and earnings upgrade

 

The management reiterated confidence in achieving 10-15 per cent volume growth in FY26 while maintaining Ebitda per tonne in the ₹4,600-5,000 range. The brokerage highlighted that the company remains focused on enhancing its value-added mix while preserving balance sheet strength.

 

Given the Q2 outperformance, Nuvama raised its FY26E, FY27E, and FY28E earnings per share (EPS) estimates by 4 per cent, 3 per cent, and 2 per cent, respectively, and maintained its ‘Buy’ rating on the APL Apollo Tubes stock. The target price has been revised upward to ₹2,093 from ₹2,039, valuing the company at 36x Q2FY28E EPS.

 

“Given a beat on our estimates, we are raising FY26E/27E/28E EPS by 4 per cent/3 per cent/2 per cent. Retain ‘Buy’ with a target price (TP) of ₹2,093 (earlier: ₹2,039) at 36x Q2FY28E EPS,” said Sneha Talreja and Jatin Manuja of Nuvama, in a note dated October 29, 2025.

Volumes remain healthy; stronger H2 ahead

 

Revenue rose about 9 per cent year-on-year (Y-o-Y), slightly below expectations of 12 per cent, as higher volumes were partly offset by softer realisations due to lower hot-rolled coil (HRC) prices. Volumes, however, grew 13 per cent Y-o-Y, underscoring strong demand momentum.

 

Management guided for an even stronger second half (H2FY26), with expected volumes of around 900,000 tonnes in Q3FY26 and 950,000 tonnes in Q4FY26. It maintained its annual growth guidance of 10-15 per cent, supported by post-monsoon recovery in construction activity and improving utilisation levels. 

 

Over the next two to three years, APL Apollo expects to sustain 10-15 per cent volume compound annual growth rate (CAGR), driven by capacity expansion, wider market reach, and continued premiumisation.

Capacity expansion on track

 

APL Apollo plans to ramp up total capacity from 5 million tonnes currently to 7 million tonnes over the next two to three years through expansions at Gorakhpur (200 ktpa), Siliguri (300 ktpa), and Dubai (700 ktpa). Dubai’s utilisation has already risen to 80-85 per cent, with new lines expected to go live by December. In the longer term, the company aims to reach a capacity of 10 million tonnes within five years.

 

That said, with growth firing across cylinders and fresh capacity set to come onstream, APL Apollo looks geared for a solid H2 and beyond. The stock stays firmly in the spotlight as one of the Street’s favourite structural steel bets.