During Tuesday’s trading session, the shares of the world’s largest aluminium conductor manufacturer, the 3rd largest transformer oil manufacturer and India’s largest renewable cables manufacturer are trading at a discount of 58 percent. With such a significant markdown, the key question arises: Should you consider buying the stock?
Founded in 1958, Apar Industries Limited operates in the diverse fields of electrical and metallurgical engineering, offering value-added products and services in power transmission conductors, petroleum specialty oils, power & telecom cables and house wires.
Price Movement
With a market capitalisation of Rs. 19,923.5 crores, the shares of Apar Industries Limited jumped to Rs. 5,199.45 on BSE, up by around 4.6 percent, as against its previous closing price of Rs. 4,972.8. The stock hit its 52-week high at Rs. 11,797.35 on 8th January 2025, and compared to current price levels of Rs. 4,948.5, the stock is trading at a discount of nearly 58 percent.
Management Guidance
The management has set a target margin of Rs. 28,500 annually for the conductor segment and anticipates further improvement as the product mix becomes more stable. For the cable division, the company is aiming to achieve top-line growth of 25 percent in value terms, while the conductor and oil divisions are projected to see volume growth of 10 percent and 5–8 percent, respectively. Management remains optimistic about the company’s core business fundamentals and foresees sustained growth across both domestic and export markets.
A strategic focus has been placed on premium product offerings and expanding approvals in the U.S. market, which is seen as a key area of opportunity. Encouraging signs of recovery in the U.S. are also emerging, with a rise in inquiries and a positive outlook for business expansion. In addition, the company is actively implementing Industry 4.0 initiatives aimed at improving productivity and enhancing margins over time.
Also read: Semiconductor stock to buy now for an upside potential of more than 55%; Do you own it?
Segmental Performance
Apar Industries reported a total segment revenue of Rs. 4,985.23 crores for Q3 FY25. The Conductors segment emerged as the highest contributor, generating Rs. 2,449.13 crores, which accounted for 49.12 percent of the total segment revenue.
The Transformer and Speciality Oils segment followed with revenue of Rs. 1,231.76 crore, contributing 24.7 percent, while the Power/Telecom Cables segment reported Rs. 1,266.08 crore, making up 25.4 percent of the overall segment revenue. The Other segment added Rs. 38.26 crore, representing 0.76 percent of the total revenue.
Financials
Apar Industries reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 18 percent, rising from Rs. 4,009 crores in Q3 FY24 to Rs. 4,716 crores in Q3 FY25.
However, the company’s net profit decreased from Rs. 218 crores to Rs. 175 crores over the same period, representing a decline of around 20 percent YoY. The company’s revenue from operations grew at a CAGR of around 36 percent between FY21 and FY24, while the net profit jumped by 73 percent CAGR over the same period.
Key Financial Ratios
In terms of key financial metrics, Apar Industries has a Return on Equity (RoE) of 26.8 percent and a return on capital employed (RoCE) of 44 percent. Additionally, the stock has a P/E ratio of 24.8, compared to the industry’s P/E ratio of 44.8, and its debt-to-equity ratio stands at 0.13.
Written by Shivani Singh
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