EUR 120.00 For Business Accounts Only

MOSL: Morning India (7/September/21): 1. Apollo Tubes (The new normal!); 2. India Strategy (The Eagle Eye); 3. AGIC: CEO Track Takeaways (a. TCS; b. RazorPay; c. Jubilant FoodWorks; d. Hindalco; e. Tata Steel);

MOrning India (7/September/21): 1. Apollo Tubes (The new normal!); 2. India Strategy (The Eagle Eye); 3. AGIC: CEO Track Takeaways (a. TCS; b. RazorPay; c. Jubilant FoodWorks; d. Hindalco; e. Tata Steel); 4. Pharma Monthly

 

Today’s top research idea

APL Apollo Tubes | Initiating Coverage: The new normal! Buy with TP of INR2065, 21% upside

• APL Apollo Tubes (APAT) is the largest manufacturer of Structural Steel Tubes in India, which finds applications in residential and commercial buildings, warehouses, etc. It enjoys ~50% market share in India, and operates through a network of 10 plants, over 800 distributors, more than 1,500 SKUs, and 200,000 fabricators.
• APAT's diversified product portfolio and pan-India presence helps in mitigating concentration risk. Higher sweating of assets (capacity utilization at 63%) will lead to kicking-in of operating leverage and better profitability. Robust distribution network, along with warehouses, higher retail network, and SKUs are expected to improve last-mile connectivity.
• Merger with Apollo Tricoat Tubes' (Tricoat) is margin and RoE accretive and is expected to create value for shareholders. Common ad spends and distribution network, along with other synergy benefits, is expected to benefit APAT in the medium-to-long term.
• Tricoat's EBITDA/MT is 1.7-1.9x higher than blended EBITDA/MT, and is expected to further increase revenue share of VAP, improve overall margin, and further de-commoditize the business.

 

Piping hot news

Listed private manufacturing firms' sales soar 75 pc in Q1 on low base: RBI data

Sales of 1,647 listed private manufacturing companies recorded "extraordinarily high" growth of 75 per cent in the first quarter of FY'22 mainly due to a very low base in the pandemic-hit year-ago period, showed RBI data released on Monday. Their sales had declined by 41.1 per cent in the April-June quarter of FY2020-21. In absolute terms, the sales of the manufacturing companies worked out at Rs 7,02,791 crore as against Rs 3,97,233 crore in the first quarter of FY2020-21. Sales growth (y-o-y) of information technology (IT) sector companies, which remained in the positive terrain throughout the pandemic, accelerated to 17.5 per cent in first three months period of 2021-22 from 6.4 per cent in the previous quarter.