Apollo Pipes Ltd stock review, opportunity

Articles > Submitted by munna on 10/4/2020 | Views: 139

In this post, I am going to review the Apollo Pipes Ltd company. Apollo Pipes Ltd. is APL Apollo group of companies that is know to create wealth for the investors by early mover advantage, innovation, latest technology implementation and also known for solid management.

Its other group companies are APL Apollo Tubes, Apollo Tricoat Tubes.

Table of Contents

    Company Highlights

    1. Market cap - 518 crores as of 4-Oct-2020
    2. Among top 10 PVC pipe manufacturer
    3. Strategically located 4 manufacturing plants to cover all Indian geography
    4. Planed capex of approximately 120 million for new plant ni Raipur and Chattisgarh
    5. All capex to be funded through internal accruals
    6. Capex of 145 crores in last 5 years
    7. 84,000 MTPA capacity as of March 2020
    8. Adding capacity to aid long term growth of 90,000 MTPA in FY 2021
    9. 170+ distributors
    10. 500+ dealers
    11. 1000+ products
    12. Product delivery time 48 hours due to extensive distribution network
    13. Dominant and Leading presence in North India, slowly capturing wester part of India
    14. Patented product - "Super Lock System" pipes 
    15. Aim to deliver 25%+ CAGR volume growth over next 3 years

    5 years Financial Highlights

    1. Sales - 14% CAGR in volume
    2. EBITDA - 24% CAGR
    3. Revenue - 19% CAGR
    4. PAT (Profit After Tax) - 29% CAGR
    5. Debt to Equity from 0.6 to -0.1
    6. ROE - 11.7%
    7. ROCE - 20%

    Secotrs in which its products are used

    Catering to leading and promising sectors where India is going to grow in coming decades. 

    1. Agriculture sector
    2. Water management (residential and commercial) sector
    3. Oil (related to FMCG and Chemical ec.) and Gas sectors
    4. Construction sector (Borewell, Sanitation etc)

    Products Portfolio

    1. uPVC piping systems
    2. cPVC piping systems
    3. HDPE piping
    4. Plastic/Steel taps, showers and other plumbing accessories
    5. Cement Solvent
    6. Water storage solutions (tanks)
    7. Commode  accessories

    Recent Acquisitions

    1. Kisan Mouldings manufacturing units in Bengaluru

    Brandings / Promotions

    1. Leveraging APL Apollo brand
    2. Principal sponsor of Pro Kabbaddi League
    3. IPL TVC - Principal sponsor of Delhi Capitals
    4. Branding sponsor of 'India vs West Indies' cricket series

    Key growth drivers

    1. PVC industry expected to grow at 15% CAGR
    2. Organized players account for 60% market share
    3. Government push for clealiness and sanitation
    4. Affordable housing demand
    5. Irrigation and infra water supplies requirements

     

    Overall it looks good to ride on Indian development story.

     

    Disclaimer: I am not SEBI registered, this post is for educational purpose. Please do your own research before investing. Source: company website

    Website disclaimer: The views, opinions, investment advices (if any) expressed by author on Sharefunda.com are their own and not that of the website or its management. Users are advised to contact certified financial advisor before making investment decisions.

    Submitted by munna on Sunday, October 4, 2020

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