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Apar Industries hits record high on healthy outlook; up 200% from Jan low

For Q1FY24, Apar Industries had posted 61 per cent year-on-year jump in profit after tax at Rs 197 crore.

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Illustration by Binay Sinha

SI Reporter Mumbai

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Shares of Apar Industries hit a record high of Rs 4,336.15, as they rallied 4.5 per cent on the BSE in Wednesday’s intra-day trade in an otherwise subdued market on strong demand and healthy order book. In comparison, the S&P BSE Sensex was down 0.26 per cent at 65,234 at 10:58 AM.

The stock price of Apar Industries has zoomed 205 per cent from its January 2023 low of Rs 1,357.50 on the BSE. Thus far in the current calendar year 2023, it soared 135 per cent, as compared to 6.7 per cent rise in the benchmark index.

Apar Industries is a leading global manufacturer of conductors, cables, speciality oils, lubricants and polymers. The company has been one of the largest manufacturers of aluminium and alloy conductors in the world. The company has third-largest global manufacturer of transformer oil and a wide range of cable solutions viz., solar, wind, nuclear, mining, defence, navy, railways, housewires in India.
 

For the first quarter of FY24 (Q1), Apar Industries posted 61 per cent year-on-year (YoY) jump in profit after tax at Rs 197 crore. Revenue grew 22 per cent YoY at Rs 3,773 crore with volume-led growth across all divisions. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved 172 bps to 9.54 per cent from 7.82 per cent in Q1FY23. Cable business recorded higher EBITDA post forex margin at 11.4 per cent.

Indian power sector is undergoing a significant change that has redefined the industry outlook. The power industry's future in India is bright, and sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country.

In Union Budget FY24, Rs 35,000 crore ($ 4.3 billion) outlay for energy security, energy transition and net zero objectives and Rs 20,700 crore ($ 2.52 billion) outlay was provided for renewable energy grid integration and evacuation from Ladakh. The battery energy storage systems have been promoted to steer the economy on the sustainable development path.

The total order book for conductors stood at Rs 5,356 crore as of June 30, 2023. The Ministry of New and Renewable Energy has a target of awarding 50 gigawatts per annum of renewable energy capacity, including 10 gigawatts per annum from wind energy between the 2024 and 2028. The company’s belief is that even a portion of these aggressive plans get executed, the demand for conductors, cables and transformer oil will all remain strong.

The management said it is seeing a gradual shift worldwide to an increased usage of specialized/ACCC-type conductors as customers are building more robust and higher capacity transmission system to evacuate power, especially from the renewable power sources.

The management further said it had a positive start to FY24 with volume-led growth across all divisions. However, in the short-term, it expects a bit of a slowdown in the export markets as there is a clear sign and signal of de-inventorization of excess inventories, especially in the United States and to some extent in Europe.



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First Published: Aug 16 2023 | 11:09 AM IST

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