APL Apollo Tubes

“We are confident that we will deliver double-digit volume growth in these two categories.”

“Then we will change our guidance for the next quarter. We also want to see another quarter because we have worked on innovations and costing.”

“we target to achieve 7 million ton of green field plus brownfield capacity, plus 1 million ton of de-bottlenecking capacity which we have targeted to achieve in the next two years.”

“Our capacity is of 7 lakh tons. And I think we have done 135k tons in Q1 so, 7 lakhs divided by 4. So, 175k is the capacity per quarter.”

“what we are getting at run rate of 960,000 tons per quarter, our utilization rates are almost 70% - 75%.”

“Yes, so this capacity will increase to 500,000 tons as the brownfield expansion is underway, right? We are adding two new mills.”

“So, just to add to it Sailesh, 50% goes into housing, 25% go into commercial and industrial, and 25% go into other industrial applications.”

“25% of the mix.”

“right now the two main segments like Apollo brand and roofing products, they contribute almost like 92% - 93% to the total volume.”

“Now, if steel prices go down, our SG Premium sales will start going up, right? So, that will boost the overall volume”

“I mean, we are currently at run rate of 100,000 tons per annum versus capacity which will be ready by March 2027 will be almost 500,000 tons. So, whenever Dubai situation improves, we can immediately hit 200,000 or 300, 000 or 400,000 tons in subsequent quarters, right, that run rate.”

“As you saw in Q2, performance in Q3 has also been good so far. We are not seeing any decline anywhere. We are also looking at more than double-digit growth in this quarter and in the second half.”

“October is good. Good. As per our guidance, we are doing above that only.”

“I do not think there will be any negative impact. And even if it is there, then there will be a slight decrease of 2% - 4% in demand.”

“As we are seeing order books everywhere, people are not finalizing the quotations due to higher steel price but demand, offer, enquiries are very high.”

“In this quarter, we have even reduced the freight cost by 150/ ton, we have also reduced our electricity cost.”

“So, realization on light structures is slightly lower than the overall APL Apollo product portfolio. So, that is why the GP per ton is around Rs. 500 per ton lower on quarter on quarter basis.”

“The other players are below Rs. 68,000–Rs. 70,000, and our HR coil is around Rs. 60,000. We are getting a conversion of Rs. 10 per kg. At this point in time, we are making a margin of Rs. 6,000 even on our worst item.”

“So, at that time, I will not be able to say Rs. 6000 crores EBITDA margin, I will come back on Rs. 5500 crores to Rs. 5600 crores.”

“First, volumes from our non-profitable business have ceased. This has expanded our margins because those volumes did not contribute any margin earlier either. Second, the additional capacity for our roofing products has expanded our margins.”

“On balance sheet front, the working capital days remain zero and the cash on books increased by 15% as at September 2026 to Rs. 16 billion versus Rs. 14 billion in June quarter.”

“We have a total of 1.5 to 2 lakh tons of inventory. Out of that, our OEM order book, dealer network order book is of 75,000 to 1 lakh tons.”

“Boss, now our net cash balance is around Rs. 1600 crores. Now, we are trying, that our cash balance will increase by Rs. 600 crores to Rs. 700 crores.”

“So, if you look at the EBITDA to OCF that will be better in FY 2027 versus FY 2026 once we close the books, annually.”

“Last year, it was around, free cash flow Rs. 1300 crores.”

“We have started to see the product line for Defence and Aerospace sectors also on the back of recently commissioned specialized tube mill which can produce sizes from 250 by 250 millimeter diameter with 16 millimeter thickness.”

“We have mapped the applications and we have started producing samples and giving to various authorities and agencies which shall bear results in the next two to three months.”

“For example, we have now started a line to develop many items for ISRO and DRDO. Normally, if we submit these items for development, approval may take 1, 2, 3, or 4 months. If the items are approved, our margins will increase significantly.”

“And below free cash flow, we did make dividend payments in the month of August, September. So, that also impacted the total net cash flow.”

“So, some FOREX currency, gain and losses between the two quarters.”

“Why it was difficult for us is, as Dubai volume was only 40% for what we achieved in past, because neither the material can be imported nor it can be exported from there.”

“Number 2, our India's exports are tough due to very high container freight prices. So, we have been hit in the two sectors very hard. But in spite of it, we are quite comfortable that we will do more than the guidance given by us.”

“Our half-a-million-ton capacity there is ready. Whenever operations start, my 10,000 ton EBITDA business is ready. I have a Rs. 500 crore business ready, but the situation is not in my hands.”

“If you look at the market, there is a shortage of steel. I do not even have much steel for the loan business. I do not have much steel to adjust with because all the steel plants have had many shutdowns. November is also bad.”

“There will be a loss in imported material. Number 2, what happens is, the gap will increase between secondary and primary. When the gap increases between secondary and primary, then there will be a cash loss in that sector.”

“We have delivered our best quarter in terms of sales volume, EBITDA and net profit. The volume of 960,000 tons was not easy to achieve in the Quarter 2 given our UAE operations remain disrupted due to ongoing Middle East disruption”

“This year, 100% it would have done Rs. 2400 crores if Dubai performs as per our expectation.”

“So, other income if you see, for the H1, it is around Rs. 80 crores”

“Yes, it is. Thanks for highlighting. We will correct it.”