Apar Industries FY24 Annual Earnings Summary
4 quarters covered · ₹16,167 Cr revenue · ₹825 Cr PAT · 10.1% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Promise tracking available after 2+ quarters of coverage.
Risks flagged during the year
Chinese exporters are becoming more aggressive in Asia, Africa, and Latin America, potentially pressuring margins and market share.
Q1 FY24 · mediumManagement voluntarily highlighted that customers in the US and Europe are reducing inventory levels, leading to a temporary slowdown in export orders.
Q1 FY24 · mediumManagement noted that some large US projects could be pushed back as developers wait for interest rates to decline, which may impact demand.
Q1 FY24 · mediumIn response to an analyst question, management acknowledged that Chinese competition has increased in markets like Europe, Latin America, and Africa, though not in the US due to tariffs.
Q2 FY24 · mediumDistributors in the US and Europe are reducing inventory levels, leading to slower order inflows for cables and conductors. This could persist for several months, impacting near-term export revenue.
Q2 FY24 · mediumA major base oil supplier faced refinery issues, forcing Apar to buy from the spot market at higher prices, compressing oil division margins. While normalized in September, residual impact may spill into Q3.
Q3 FY24 · mediumIncreased shipping rates and longer transit times due to Red Sea diversions hurt export competitiveness, especially to Europe and West Africa.
Q3 FY24 · mediumUS customers holding high inventory levels led to flattish cable revenue; recovery expected but timing uncertain.
Q4 FY24 · mediumU.S. demand remains soft due to high interest rates and election uncertainty; recovery may take longer than expected.
Q4 FY24 · mediumHigher freight costs due to Red Sea disruptions affect export competitiveness, especially to Europe.
Q1 FY24 · lowAn analyst noted that the premium product contribution in conductors fell to 42% from 47% YoY, which could pressure margins if the trend continues.
Q2 FY24 · lowInterest costs rose sequentially due to higher discounting, increased volumes, and rising interest rates. Management expects stabilization but higher rates could persist.
What changed through the year
Q1 FY24 · Conductor volume growth of ~10% for FY24
Management maintained guidance of ~10% volume growth in conductors for the full year, despite near-term export headwinds.
Q1 FY24 · Conductor EBITDA per ton of INR 25,000+ with tailwinds
Guidance for conductor EBITDA per metric ton remains at INR 25,000 plus tailwinds, which are expected to taper over the next two quarters.
Q1 FY24 · Cable EBITDA margin of 10%-12%
Management guided cable division EBITDA margin in the range of 10%-12% for FY24.
Q1 FY24 · CapEx of INR 350-400 crore over 12-18 months
CapEx plan remains unchanged at INR 350-400 crore, with two-thirds allocated to cables.
Q2 FY24 · Capex of INR 350-400 crore for FY24
Management expects to spend INR 350-400 crore on capex by end of FY24, with INR 150 crore already spent in H1. The capex is expected to generate revenue of INR 4,000-5,000 crore at current asset turnover ratios.
Q2 FY24 · Full ramp-up of new capacities by FY25
New capacities from the current capex cycle will be fully loaded during FY25, with commissioning expected by Q4 FY24.
Q2 FY24 · BharatNet participation intent
Apar intends to bid for at least one package in the BharatNet project, which involves end-to-end supply and network operation, though final tender details are pending.
Q3 FY24 · Conductor volume growth of 15% for FY25
Management expects 15% volume growth in conductors for the next year, supported by capacity additions.
Q3 FY24 · Cable business CAGR of 25% for next few years
Cable business expected to grow at 25% CAGR, driven by renewable energy, railways, defense, and mining.
Q3 FY24 · Transformer oil double-digit volume growth
Transformer oil expected to grow at double-digit rates, leading the oil vertical.
Q3 FY24 · Annual capex of ~INR 300 crore
Company plans to spend about INR 300 crore annually on capex for conductor and cable capacity expansion.
Q4 FY24 · Conductor volume growth of ~15% CAGR on a medium-term basis
Management expects conductor division to grow about 15% on volume terms on a staggered basis over the medium to long term.
Q4 FY24 · Conductor EBITDA per metric ton guidance of INR 28,000-28,500
Despite current higher levels, management continues to guide long-term EBITDA per metric ton at around INR 28,000-28,500 for the conductor division.
Q4 FY24 · Cable revenue growth of 25% YoY
Management expects cable division to grow at 25% year-on-year in value terms over the next few years.
Q4 FY24 · Annual CapEx of INR 350-400 crore
The company plans to incur around INR 350-400 crore in capital expenditure each year for capacity expansion across divisions.