At a Glance (Excerpt)

APL Apollo isn’t just bending metal — it’s bending the rules of steel profitability. From ₹8,500 Cr in sales in FY21 to over ₹20,000 Cr by FY25, this tube titan has structurally redefined the “boring steel business.” But with a P/E of 68 and promoter holding on a steady diet, is the stock hollow inside or built like a skyscraper?

1️⃣ What Do They Even Do? (A.K.A: The ‘Tubes’ Are Not Internet Ones)

APL Apollo makes branded steel pipes and structural tubes. Think:

• 🏗️ Buildings
• 🚜 Agriculture
• ☀️ Solar frames
• 🏥 Hospitals
• 🛫 Airports

Basically, if India’s building it, APL Apollo has probably supplied some part of its skeleton.

Product Split (FY24):

• Apollo Structural – 68%
• Apollo Z – 28%
• Apollo Galv – 4%

Their product sizes range from 10×10 mm to a chonky 1000×1000 mm — a world first.

2️⃣ 5-Year Financial Timeline: Steel-Strong Compounding 💹

💡 Takeaway: Revenue up 2.4x. Profit up 1.9x. OPM? Meh. But ROCE stayed muscular.

3️⃣ What’s Working: The Empire of Steel

🔨 Market Dominance

• From 27% market share in FY16 → now 50%+
• Targeting 60% by FY25
• That’s HDFC Bank-level dominance, but in tubes.

🧪 Innovation on Steroids

• 16 patents filed
• First in the world to launch color-coated structural tubes
• Only company globally making 1000×1000 mm tubes

🏭 Infra-Ready Distribution

• 10 manufacturing units
• 800+ distributors
• 50,000+ retailers/fabricators
• App with 1.45 lakh downloads for dealers/fabricators
• Even your local metal welder probably uses their stuff.

4️⃣ What’s Not Working: Read the Fine Print 🧐

😬 Valuation: Pricey AF

• P/E of 68 for a steel company?
• Even luxury startups would blush

📉 Falling Promoter Holding

• Down from 34.5% (FY22) to 28.3% (FY25)
• Should we call Apollo a PIPE dream?

🔍 Margin Compression

• OPM fell from 8% to 6%
• Value-added products (VAP) rising, but steel is still a commodity game

🧊 ROCE Cooling Off

• 32% → 23% in 3 years
• Still decent, but the cooling is visible

5️⃣ Capacity, Capex & Crazy Projects 💰

🔧 Capex Cycle

• ₹2,370 Cr spent in last 4 years
• New Raipur facility commissioned in FY24
• FY25 capex planned: ₹1,500 Cr

⚙️ Capacity Expansion

• FY24: 3.8 million tonnes
• FY25 goal: 5 million tonnes
• When you grow capacity faster than GDP, you know you mean business.

🏗️ Project Pipeline

• 45 inquiries with 42 million sq. ft. visibility
• From airports to Amazon warehouses

6️⃣ Comparison: How Do They Stack Up?

📊 Verdict: Most peers are cheaper, but APL Apollo is arguably the most “branded” and futuristic in steel.

7️⃣ EduInvesting Verdict: “Steel But Make It Sexy”

APL Apollo has done what few thought possible — turned a commoditized steel business into a growth stock. But here’s what you need to chew on:

🧨 Bull Case:

• Dominates structural pipes like Asian Paints does paints
• Constant product innovation → moat widening
• Efficient WC cycle (FY25: just 3 days)

💀 Bear Case:

• Valuation is absurd for a cyclical biz
• Promoter stake drop = hmm?
• FII holdings rising fast = good… but also means they’ll leave first

🧾 TL;DR

• 📈 Sales up 2.4x, profits up 1.9x in 5 years
• 🧪 Innovations like color-coated tubes, 1000×1000 mm monsters
• 🏭 Capacity ramp-up to 5M tons
• 🤖 Distribution digitized, market dominance real
• 🧨 P/E of 68 = nosebleed valuation

So, is it “Steel Ka Startup” or “Steel Ka Bubble”?

Only the next macro cycle will tell.

✍️ Written by Prashant | 📅 16 June 2025
Tags: APL Apollo, Steel Stocks, Structural Tubes, FY25 Recap, Infra Play, Indian Manufacturing, EduInvesting, High P/E Stocks, Raipur Facility, FII Magnet Stocks