Why is APL Apollo falling despite healthy Y-o-Y numbers in Q1? Details here

APL Apollo Tubes share price: APL Apollo Tubes share price was under pressure on the last trading day of the week, with the stock dropping as much as 4.76 per cent to an intraday low of ₹1,607.85 per share.

 

Around 9:30 AM, APL Apollo Tubes shares continued to trade lower, down 3.46 per cent at ₹1,630 per share. In comparison, BSE Sensex was trading 0.51 per cent lower at 81,764.21 levels.  CATCH STOCK MARKET UPDATES TODAY LIVE

Why did APL Apollo Tubes drop in trade today?

 

APL Apollo Tubes posted a mixed set of numbers for Q1FY26, with strong year-on-year (Y-o-Y) growth but a sequential decline across key metrics, which likely weighed on the company’s share price. 

 

Sales volume rose 10 per cent Y-o-Y to 794,000 tonnes, while revenue increased 4 per cent Y-o-Y to ₹5,170 crore. Ebitda grew 23 per cent Y-o-Y to ₹370 crore, and net profit also rose 23 per cent Y-o-Y to ₹240 crore. 

 

However, on a quarter-on-quarter (Q-o-Q) basis, the company reported a 7 per cent decline in sales volume, a 6 per cent fall in revenue, a 10 per cent dip in Ebitda, and a 19 per cent drop in net profit. Ebitda per tonne stood at ₹4,683, reflecting a 12 per cent Y-o-Y rise but a 4 per cent Q-o-Q decrease. 

 

The value-added sales mix improved to 61 per cent, up from 58 per cent in Q4FY25, while interest cost rose 19 per cent Y-o-Y and 3 per cent Q-o-Q to ₹33.3 crore. 

 

Cash profit came in at ₹290 crore, up 22 per cent Y-o-Y but down 17 per cent sequentially. 

 

The sequential softness in operational performance overshadowed the annual growth, triggering weakness in APL Apollo Tubes’ share price.  ALSO READ | SBI Life rises 2% on posting Q1 results; should you buy, sell or hold?

Nuvama analysts on APL Apollo Tubes Q1 show

 

Analysts at Nuvama termed APL Apollo Tubes’ Q1FY26 performance as mixed, with Ebitda/tonne coming in at ₹4,683, below their estimate of ₹4,900, due to operating deleverage and a one-off ESOP expense of ₹300/tonne. 

 

The management also revised its volume growth guidance downward to 10-15 per cent (from 15-20 per cent) and lowered its Ebitda/tonne outlook to ₹4,600–5,000 (from earlier guidance of above ₹5,000). 

 

For FY27, the company is targeting a 15-20 per cent volume growth and aims to achieve Ebitda/tonne in the range of ₹5,500– 6,000. 

 

Given the underperformance on Ebitda/tonne and muted volumes, Nuvama has cut its FY26E, FY27E, and FY28E EPS estimates by 4 per cent each. However, it maintains a ‘Buy’ rating with a revised target price of ₹1,941 (earlier ₹2,023), valuing the stock at 36x Q1FY28E EPS. Analysts also recommend monitoring the recent rise in HRC-Patra spread, now around ₹9.