Metal Stock Records Highest Quarterly Sales Volume, Motilal Oswal Says Buy

Motilal Oswal has recommended buy call to mid-cap metal stock, APL Apollo Tubes with target price of Rs 1930 apiece. Current market price of APL Apollo Tubes share is Rs 1602.45 after a dip of Rs 2.30% on BSE. APL Apollo said in its regulatory filing today that the company witnessed a 12% growth in sales volume to 6.74 lakh tonne in the second quarter from the year ago period. Check details below:

APL's Quarterly Sales Volume: As per the BSE filing dated October 4, 2023, APL Apollo Tubes Limited (APL Apollo) registered sales volume of 674,761 Ton in Q2FY24. This is the highest quarterly sales volume reported by the company." For H1FY24, the company reported sales volume of 1,336,262 Ton, an increase of 30% YoY, added the BSE filing. The contribution from value-added segment was stable at 55% in Q2FY24. APL Apollo's strategy of de-commoditization is intact. The sales mix will improve further in coming quarters with rising contribution of innovative products. We are encouraged to see strong sales growth in the heavy structural steel tubes. The sales mix should eventually move towards 70% for value added products.

APL Apollo Stock Outlook & Return: Last trading price of APL Apollo share is Rs 1602.45 apiece with intraday fall of 2.30%. Its 52-week high price is Rs 1806.20 per share and 52-week low price is Rs 990.00 per share, respectively. The company's market capitalisation is Rs 44,440.88 crore. APL Apollo shares rallied 36% in last 6-months, gained 46% in last 1-year, soared 84% in last 2-years, and offered a return of 441% in last 3-years. In last 5-years, APL Apollo shares surged 1164%.

Valuation: According to Motilal Oswal, "The incremental capacity from upcoming plants and debottlenecking, along with the addition of high-margin products from the Raipur unit, should result in strong volume growth and margin expansion going ahead. We project a revenue/EBITDA/PAT CAGR of 25%/43%/50% over FY23-25. We value the stock at 33x Sep'25E EPS to arrive at a TP of INR1,930. We maintain our BUY rating on the stock."

Disclaimer: The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.