APL Apollo Tubes (APAT) is the clear leader in India’s structural steel tube market, holding about 55% of the market and operating 11 plants that can produce 4.5 million tonnes a year.
Strong Recent Performance
In the third quarter of FY2026, the company sold a record 917,000 tonnes of steel tubes, an 11% rise compared with the same period last year. Even though hot‑rolled coil (HRC) prices fell 4% from the previous quarter, they have started to rise again after new import duties were introduced.
Why Volume Is Growing
- Capacity expansion: New production lines are being set up in fast‑growing regions such as Dubai.
- New sub‑premium brand: The launch of “SG Premium” aims at higher‑margin customers.
- Broad demand: Private‑sector projects in infrastructure, solar power and manufacturing are keeping orders strong.
Profit Outlook
Because of the recent price dip, the company’s earnings per tonne are expected to be a bit lower this quarter (about ₹5,000) versus the previous quarter (₹5,228). However, analysts still see solid growth ahead, projecting a compound annual growth rate of 14% for revenue, 29% for EBITDA and 33% for net profit between FY25 and FY28.
Valuation and Recommendation
The stock is valued at 35 times the estimated earnings for FY27, giving a target price of ₹2,260 per share. The recommendation remains a BUY.
Takeaway
APL Apollo Tubes is growing its sales and expanding capacity while launching a higher‑margin brand. Even with short‑term price pressure, the firm is on track for strong earnings growth, making it an attractive option for investors.
Remember, this is just a perspective, not a prediction. Do your own research before making any investment decisions.