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Sustained Chinese competition in export markets
View Risks →Apar Industries Limited — Q2 FY25
Apar Industries reported a strong Q2 FY25 with consolidated revenue of INR 4,645 crore, up 18.4% YoY, driven by robust domestic growth of 61.1%.
bullish
high
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Apar Industries reported a strong Q2 FY25 with consolidated revenue of INR 4,645 crore, up 18.4% YoY, driven by robust domestic growth of 61.1%. EBITDA grew 7.8% YoY to INR 402 crore, with margins at 8.7%, impacted by a shift in mix toward lower-margin domestic business. PAT rose 11.5% YoY to INR 194 crore. The conductor segment saw flat volumes due to lower exports, but premium product mix remained healthy at 42.2%. The oil business posted 12.1% revenue growth, with transformer oil volumes up 25%. Cables grew 39% on strong domestic demand. Management expects export recovery, particularly in the US, and remains confident in the long-term energy transition theme. Key risk: sustained Chinese competition in ex-US export markets could pressure volumes and margins.
अपार इंडस्ट्रीज ने दूसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कुल कमाई 4,645 करोड़ रुपये रही, जो पिछले साल से 18.4% ज्यादा है। भारत में कारोबार 61.1% बढ़ा। कंपनी की कमाई और खर्च का अंतर (EBITDA) 402 करोड़ रुपये रहा, जो 7.8% बढ़ा, लेकिन मुनाफा दर 8.7% पर कम रही क्योंकि घरेलू कारोबार में कम मुनाफा है। शुद्ध मुनाफा 11.5% बढ़कर 194 करोड़ रुपये हुआ। तारों का कारोबार सपाट रहा, लेकिन अच्छे उत्पादों की हिस्सेदारी 42.2% रही। तेल कारोबार में 12.1% और ट्रांसफॉर्मर तेल की बिक्री 25% बढ़ी। केबल का कारोबार 39% बढ़ा। कंपनी को अमेरिका में निर्यात बढ़ने की उम्मीद है, लेकिन चीन से प्रतिस्पर्धा जोखिम है।
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Read Transcript →Quarter Snapshot
Domestic Revenue Growth
61.1%
+61.1pp YoY
Domestic revenue grew 61.1% YoY in Q2, driven by strong order inflows across all segments.
Conductor Premium Product Mix
42.2%
+2.2pp YoY
Premium conductor mix remained healthy at 42.2%, supporting per-ton EBITDA of INR 37,702.
Conductor Order Book
INR 6,615 crore
N/A
Pending order book for conductors stood at INR 6,615 crore, with new orders of INR 2,234 crore in Q2.
Transformer Oil Volume Growth
25%
+25% YoY
Transformer oil volumes grew 25% YoY, driven by strong domestic and global demand.
What Changed vs Last Quarter
NEW
US business expected to show sequential growth
Management sees sequential improvement in US orders, with Q2 order intake up 17.5% QoQ, and expects this trend to continue.
NEW
Conductor EBITDA per ton guidance maintained at INR 28,500
Despite current higher margins, management maintains a conservative guidance of INR 28,500 per ton for conductor EBITDA.
NEW
CTC capacity doubling to come on stream in January
APAR is doubling its CTC conductor capacity, with the new capacity expected to be operational in January 2025.
UPDATED
Conductor volume growth may fall short of 10% guidance for FY25
Management expects full-year conductor volume growth to be below the earlier 10% guidance due to lower H1 volumes, but aims to make up in H2.
DROPPED
Cable revenue growth of 25% for FY25
Cables division targets 25% annual revenue growth, assuming US demand recovery and strong domestic momentum.
DROPPED
Cable EBITDA margin 10-12%
Management expects cable EBITDA margins to remain in the 10-12% range for FY25.
DROPPED
CapEx of INR 300-350 crore in FY25
Capital expenditure for FY25 is planned at INR 300-350 crore, primarily for cable and conductor divisions.
NEW RISK
Export volumes may not recover as expected
Management's expectation of export recovery, especially in cables, may be delayed if US approvals take longer or competition intensifies.
NEW RISK
Domestic margin pressure from mix shift
Higher domestic mix, which carries lower margins than exports, could continue to compress overall EBITDA margins.
NEW RISK
Reconductoring policy and execution delays
While reconductoring is a key growth driver, actual execution has been slow, with only 20% of annual transmission line target achieved in H1.
RISK GONE
Container shortage and logistics disruption
Export shipments across all divisions were affected in June due to container availability, with over INR 270 crore of shipments postponed. This may persist into Q2.
RISK GONE
Regulatory delays in US and Europe
Delays in regulatory approvals for transmission line projects in the US and Europe have affected export demand, particularly for conductors.
RISK GONE
Dependence on US market for cables
Cable exports to the US have been volatile due to inventory rationalization and regulatory delays; recovery is expected but timing uncertain.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q1 FY25, Q2 FY24, Q3 FY24, Q4 FY24
Capital expenditure for FY25 is planned at INR 300-350 crore, primarily for cable and conductor divisions.
Mentioned in Q1 FY24, Q1 FY25
Management expects cable EBITDA margins to remain in the 10-12% range for FY25.
Mentioned in Q1 FY25, Q4 FY24
Cables division targets 25% annual revenue growth, assuming US demand recovery and strong domestic momentum.
Mentioned in Q1 FY24, Q2 FY24
Distributors 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.
Mentioned in Q3 FY24, Q4 FY24
Higher freight costs due to Red Sea disruptions affect export competitiveness, especially to Europe.
Fast read
Guidance and risk preview
Management expects full-year conductor volume growth to be below the earlier 10% guidance due to lower H1 volumes, but aims to make up in H2.
Chinese competitors are aggressively pricing in ex-US markets, potentially limiting export volumes and margins.
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