APL Apollo Tubes Reports Strong Q2 FY26 Results, Details Capacity Expansion & Future Outlook
APL Apollo Tubes reported highest Q2 FY26 volumes, EBITDA, and PAT. Management is confident in H2 growth, margin expansion, and executing capacity expansion plans, funded internally, with strong ROCE.
The announcement includes strong Q2 FY26 financial performance, a positive outlook for H2, significant capacity expansion plans with clear funding, and strategies for margin improvement and market leadership, all of which are highly impactful for investors.
The company reported all-time high quarterly volume, EBITDA, and PAT despite a challenging market. Management expressed confidence in future growth, margin expansion, and strategic capacity additions, along with strong ROCE and internal funding for capex.
* APL Apollo Tubes Limited released the transcript of its Q2 FY26 Investors Conference Call, held on October 29, 2025. * The company achieved its all-time highest quarterly volume, EBITDA, and PAT for Q2 FY26, despite a challenging environment marked by heavy monsoon and a weak construction sector. * Sales volume recovered in Q2 versus Q1, driven by strong capacity utilization at the Raipur and Dubai plants. * EBITDA margins expanded above ₹5,000 per ton, attributed to: * Brand power, with EBITDA spreads for the general category almost doubling to ₹3,400 per ton. * Value-added mix improvement, particularly from Dubai and Raipur plants, which have EBITDA per ton above ₹5,500-₹6,000. * Operating leverage gains from high volumes (850,000 tons plus). * The company successfully increased pricing by ₹2,000 to ₹3,000 per ton in January 2025, which the market has absorbed. * Management expressed confidence in meeting its H1 FY26 guidance of 10% to 15% volume growth and an EBITDA spread of ₹4,600 to ₹5,000 per ton. The second half is expected to perform better than H1. * India's adequate steel supply is beneficial for downstream companies. * The strategy to expand capacity in international markets (Abu Dhabi with 1 million ton) and Eastern Indian markets (Gorakhpur with 2 lakh ton per annum and Siliguri with 3 lakh ton per annum) remains on track, aiming for double-digit volume growth over the next 3-4 years CAGR. * Working capital days remained in single digits (0 as of September 2025), boosting ROCE to over 32%-33%, which is considered sustainable. * A planned capital expenditure of ₹1,500 crore for capacity expansion will be entirely funded from internal cash flows. * The long-term vision includes potentially reaching 10 million tons capacity in 5 years, with EBITDA margins potentially increasing to ₹6,000 per ton. * Current capacity utilization is around 70% (3.5 million tons on 5 million tons capacity), with the Dubai plant operating above 85%. * The 12% safeguard duty on HRC prices is seen as a positive, limiting downside volatility. * The company launched a new brand, 'SG Premium', for a lower price segment (10,000-15,000 tons/month volume) to allow competition, while the APL Apollo brand maintains a premium of ₹3,000-₹6,000 per ton. * Dubai plant capacity will increase to 5 lakh tons per annum with new lines starting in November 2025 and March 2026. Two warehouses are planned in Europe (Liverpool and Antwerp) to further expand margins by EUR 50. * The company maintains a strong stance against using secondary material due to quality and environmental concerns. * EBITDA growth is projected to be higher than volume growth (15%-20% EBITDA growth for 10%-15% volume growth). * Q3 and Q4 FY26 targets for EBITDA are ₹450 crore each.
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APL Apollo Tubes Limited filed this with the NSE as a statutory disclosure, categorised under concall transcript released. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by APL Apollo Tubes Limited. Read the original for the full detail.