At a glance

Apar Industries, India’s silent compounder, has exploded with 2.5x revenue and 6x net profit growth in 5 years — powered by conductors, cables, and chemical oils.

But now with a P/E of 38.6, ROCE cooling off, and debt ticking up, is this the next ABB? Or are investors riding wires with no insulation?

1. 🏭 About the Company

Apar Industries, founded in 1958 by Dharmsinh Desai, is a powerhouse in the electrification ecosystem:

• Conductors (48% of FY25 revenue): Largest in the world. Literally. From boring aluminum to high-tech HTLS conductors for grid upgrades.
• Transformer & Specialty Oils: For power, railways, renewables, and EVs — Apar oils everything except investors’ egos.
• Power/Telecom Cables: Riding the boom in data centres, EVs, smart infra.

Also executes turnkey power transmission projects — 165 completed so far. Think of it as the backbone behind India’s backbone.

2. 👨‍💼 Key Managerial Personnel (KMP)

• Kushal Desai – Chairman & MD, second-gen leadership and key driver of export growth.
• Chintan Shah – CFO, keeps the wires tight and costs grounded.
• ✅ No major board churn, but promoter holding has slipped from 60.6% to 57.8% in 3 years — not panic, but not passive either.

3. 🧾 Financial Performance (FY21–FY25)

📈 Revenue (₹ Cr)

5-year CAGR: 30%+ — Not just wires, this is lightning.

💥 Net Profit (₹ Cr)

Profit growth: 5.9x in 5 years
CAGR: 44%
That’s FMCG-tier profit growth in a capital goods outfit.

⚙️ Operating Margins & Returns

Margin expansion is limited, but return ratios are elite. You’re not buying a PSU here.

4. 📉 Forward-Looking Fair Value (FV)

Assumptions:

• FY26E PAT: ₹975 Cr
• Fair P/E Band: 25–32x
• Market Cap Range: ₹24,375–₹31,200 Cr
• Shares Outstanding: ~4 Cr

🎯 Fair Value per share: ₹6,100 – ₹7,800

💣 CMP is ₹7,896 → We’re basically pricing in FY27 already. That’s the market saying: “You better keep compounding, bro.”

5. 🔌 Growth Triggers & Strategic Moves

🔋 Electrification Megatrend

• Demand from transmission infra, discom upgrades, renewables
• EV charging infra = more cables, more oils

🌎 Export Boom

• Apar’s specialty conductors are shipped to 40+ countries
• Export revenue is now >40% of topline

🏗️ EPC & Turnkey Projects

• High-margin add-on business, scaling steadily
• Completed 165 T&D lines and substation projects

🛢️ Specialty Oil Expansion

• Crucial supplier to power transformers, wind, rail, and data infra
• Fast-growing segment with high stickiness

6. 🧠 EduInvesting Take

✅ Why Bulls Love Apar:

• Growth is secular, not cyclical
• ROCE is still 30%+
• Global market leader in niche segments
• Exports = FX hedge + global optionality
• Deleveraging done without killing growth

❌ Why You Should Be Cautious:

• Valuation is euphoric
• Margins are flattening (OPM stuck at 8–10%)
• Promoters have sold 3% in 3 years
• Capex phase incoming = pressure on cash flows

It’s not a bubble. But it’s priced like a Tesla of transformers.

7. ⚠️ Risks & Red Flags

• 🎯 Raw Material Shock: Aluminum and oil prices can compress margins brutally.
• 💳 Interest Cost: FY25 finance cost = ₹409 Cr. Rising rates = margin squeeze risk.
• 🏭 Execution Risk: EPC delays, receivable spikes possible.
• 📉 Working Capital Stretch: Debtor days at 80; Inventory days ~82. Not scary, but keep it clean.

TL;DR – Should You Buy at ₹7,896?

Apar is not hype. It’s execution, leadership, and leverage-free growth in a sector that rarely gives both.

If you believe India’s power transmission + EV + infra + export story — this is a long-term compounder.

But don’t expect 90% CAGR again unless you also believe in unicorns with wire tails.

Wait for dips, don’t chase. There’s value here — just not at full voltage.

✍️ Written by Prashant | 📅 June 14, 2025
Tags: Apar Industries, Power Infra Stocks, EV Cable Suppliers, Nifty 500 Multibaggers, FY25 Recap, EduInvesting 5-Year Review, Transformer Oils, Export-led Growth