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Red Sea freight disruption
View Risks →Apar Industries Limited — Q3 FY24
APAR Industries reported a solid Q3 FY24 with consolidated revenue of INR 4,013 crore (+2% YoY), EBITDA of INR 432 crore (+24% YoY) at a margin of 10.8% (up 190 bps YoY), and PAT of INR 218 crore (+28% YoY).
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APAR Industries reported a solid Q3 FY24 with consolidated revenue of INR 4,013 crore (+2% YoY), EBITDA of INR 432 crore (+24% YoY) at a margin of 10.8% (up 190 bps YoY), and PAT of INR 218 crore (+28% YoY). Growth was driven by strong domestic demand and premium product mix in conductors (AL-59 alloy shift) and improved transformer oil margins. The conductor order book stands at INR 6,081 crore, with 40% from premium products. Cable business saw flattish revenue due to US de-inventorying, but ex-US grew 24%. Management guided for 15% volume growth in conductors, 20-25% in cables, and double-digit transformer oil growth. Risks include Red Sea freight disruptions impacting export competitiveness and potential election-related delays in domestic tenders.
एपीएआर इंडस्ट्रीज ने चालू वित्त वर्ष की तीसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कुल कमाई 4,013 करोड़ रुपये रही, जो पिछले साल से 2% अधिक है। कंपनी ने 432 करोड़ रुपये का परिचालन लाभ कमाया, जो 24% बढ़ा। इसका मतलब है कि हर 100 रुपये की बिक्री पर कंपनी को 10.8 रुपये का मुनाफा हुआ। शुद्ध लाभ 218 करोड़ रुपये रहा, जो 28% ज्यादा है। यह वृद्धि देश में मजबूत मांग और बेहतर उत्पादों की बिक्री से हुई। कंपनी के पास 6,081 करोड़ रुपये के ऑर्डर हैं, जिनमें 40% प्रीमियम उत्पादों के हैं। केबल कारोबार में अमेरिका में कम मांग के कारण बिक्री स्थिर रही, लेकिन अमेरिका छोड़कर बाकी जगहों पर 24% बढ़ोतरी हुई। कंपनी को आगे 15% से 25% तक वृद्धि की उम्मीद है। जोखिमों में लाल सागर में माल ढुलाई में रुकावट और चुनावों के कारण टेंडर में देरी शामिल है।
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Conductor EBITDA per metric ton
INR 41,530
+5% YoY
Post forex adjustment, driven by premium product mix and higher share of exports to better-margin countries.
Conductor order book
INR 6,081 crore
N/A
Order book includes 40% premium products; 25% expected to execute beyond FY25.
Transformer oil volume growth
16% YoY
+16% YoY
Transformer oil volumes grew 16% in Q3, outpacing overall oil division growth.
Cable EBITDA margin
11.5%
+170 bps YoY
Cable division maintained double-digit margins despite flattish revenue due to US de-inventorying.
What Changed vs Last Quarter
NEW
Conductor volume growth of 15% for FY25
Management expects 15% volume growth in conductors for the next year, supported by capacity additions.
NEW
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.
NEW
Transformer oil double-digit volume growth
Transformer oil expected to grow at double-digit rates, leading the oil vertical.
UPDATED
Annual capex of ~INR 300 crore
Company plans to spend about INR 300 crore annually on capex for conductor and cable capacity expansion.
DROPPED
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.
DROPPED
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.
NEW RISK
Red Sea freight disruption
Increased shipping rates and longer transit times due to Red Sea diversions hurt export competitiveness, especially to Europe and West Africa.
NEW RISK
US de-inventorying impact on cables
US customers holding high inventory levels led to flattish cable revenue; recovery expected but timing uncertain.
NEW RISK
Election-related tender delays
Upcoming Indian elections may delay awarding of transmission and BharatNet tenders by a few months.
NEW RISK
Chinese competition in export markets
Chinese competitors are routing products through third countries to enter US and other markets, though cost increases may limit impact.
RISK GONE
Export destocking in US/Europe
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.
RISK GONE
Base oil supply disruption
A 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.
RISK GONE
Interest cost increase
Interest costs rose sequentially due to higher discounting, increased volumes, and rising interest rates. Management expects stabilization but higher rates could persist.
RISK GONE
Competitive pressure in US market
Analyst raised concerns about Chinese competitors gaining share in US transformer markets. Management deflected, citing high duties on Chinese products, but did not provide detailed competitive analysis.
🤫 Topics management stopped discussing
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.
Fast read
Guidance and risk preview
Management expects 15% volume growth in conductors for the next year, supported by capacity additions.
Increased shipping rates and longer transit times due to Red Sea diversions hurt export competitiveness, especially to Europe and West Africa.
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