Shares of Apar Industries rallied 16 per cent to hit a new high of Rs 2,230 on the BSE in Tuesday’s otherwise weak intra-day trade. In the past six trading days, the stock has zoomed 58 per cent after the company reported a massive 210 per cent year-on-year (YoY) jump in its consolidated profit to Rs 170 crore for the December quarter (Q3FY23) led by strong operational performance.
In the past nine months, the stock of the world’s largest conductor manufacturer and India’s largest renewable cables manufacturer, has skyrocketed 245 per cent. Today, it surpassed its previous high of Rs 2,045, touched on February 2, 2023. In comparison the S&P BSE Sensex was down 0.69 per cent at 60,089 at 01:05 pm.
The company’s consolidated sales grew 76.9 per cent YoY to Rs 3,942 crore in Q3FY23. Earnings before interest, tax, depreciation, and amortization (Ebitda) grew 199 per cent YoY to Rs 349 crore, with Ebitda margins expanded by 360 bps YoY to 8.8 per cent owing to better gross margins.
The management said the company witnessed volume growth across all the three divisions and the net profit tripled on a YoY basis. “We are optimistic about the growth prospects of our company as we believe we are appropriately placed to tap the benefits of infra-led spends, push towards renewable energy as well as China+l,” the management said.
Analysts at Prabhudas Lilladher revise their FY23/24/25E estimates by 40 per cent/30 per cent/24 per cent after factoring in an increasing share of premiumisation & exports along with strong volume growth across segments, expanding international footprints and strong outlook for cables business.
Conductor segment growth (up 103 per cent YoY) is driven by conventional conductors in exports market and premium products in domestic markets, thereby driving profitability. Cable business is likely to continue with its robust show led by strong demand for elastomeric cables from renewable energy installations, railways & defence, the brokerage said in a result update.
Going forward, conductors and cables business is likely to witness strong traction from exports led by increased infrastructure spends in key markets such as USA, Europe etc. Analysts believe Apar Industries’ focus towards value added products and exports business will drive strong topline and profitability in the long run. The stock is quoting close to Prabhudas Lilladher’s 12-month target price of Rs 2,260 per share.