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Shares of Apar Industries rallied 7 per cent on the BSE to hit a record high of Rs 5,801 in Tuesday’s intra-day trade after the company said its board will meet on Thursday, September 28, 2023 to consider fund raising plans.
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The stock surpassed its previous high of Rs 5,740 touched on September 20.In the past one year, the stock price of Apar Industries has zoomed 357 per cent as compared to a nearly 16 per cent rise in the S&P BSE Sensex. Thus far in the calendar year, it has soared 212 per cent as against an 8 per cent gain in the benchmark index.
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The company is the 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.
Apar Industries’ revenue in June quarter (Q1FY24) rose by 22 per cent year-on-year (Y-o-Y) to Rs 3,773 crore led by higher volumes with a 92.1 per cent increase in the cable division exports and 57.7 per cent increase in the conductor segment.
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.
The company posted 61 per cent Y-o-Y jump in profit after tax at Rs 197 crore.
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 believes that if even a portion of these aggressive plans get executed, the demand for conductors, cables and transformer oil will all remain strong.
Last week, CARE Ratings revised the ratings of the company’s long term bank facilities from “A”, Outlook Positive to “A+”, Outlook Stable. The ratings of short term bank facilities remained unchanged to “A1”.
The Stable outlook reflects that scale and operating margins will continue supported by healthy order book and its strong market position in conductors and specialty oil segment with increasing share from premium products in the near to medium term, the rating agency said in rationale.
Furthermore, CARE Ratings expects the favourable demand prospects from the industry in power and distribution with sizeable capex to provide further growth opportunities to the company.
