Steel products maker APL Apollo Tubes Ltd on Monday (January 1) released its business update for the third quarter of the fiscal year 2023-24, revealing a marginal decrease in sales volume to 6,03,659 tonnes compared to 6,05,049 tonnes in Q2 of FY23.
However, the company reported a 19% year-on-year growth in sales volume for the first nine months of FY24, totalling 19,39,921 tonnes, according to a stock exchange filing.
"For 9MFY24, the company reported a sales volume of 19,39,921 Ton, an increase of 19% YoY. The Q3FY24 sales volume declined QoQ due to channel de-stocking in anticipation of steel price correction. In the first two months of Q3FY24, the global steel prices had fallen 12% from the peak levels," the company said.
The dip in the third quarter sales volume is attributed to channel de-stocking as a precautionary measure amid expectations of a correction in steel prices. Global steel prices had seen a 12% decline from peak levels in the initial two months of Q3 of FY24.
APL Apollo emphasised its strategic focus on de-commoditisation, with the value-added segment contributing 59% to sales in Q3FY24. The ramp-up of the new Raipur plant aligns with expectations, achieving utilisation levels of 41% for Q3 of FY24 and reaching 53% by December 2023.
The company is optimistic about the increasing demand for heavy structural steel tubes, reflecting a growing trend in tubular construction. Additionally, the Dubai plant commenced production in December 2023, garnering positive responses from global steel tube distributors.
Despite the current dip, APL Apollo anticipates an improvement in overall sales volume in the upcoming quarters, citing visible signs of re-stocking following a recent reduction in domestic steel prices.
Shares of APL Apollo Tubes Ltd ended at ₹1,525.55, down by ₹11.10, or 0.72%, on the BSE.
(Edited by : Shoma Bhattacharjee)
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