The brokerage set a target price of Rs 1,490 per share on the stock, an upside of 31 percent from Friday's closing price of Rs 1,135.75 apiece on BSE.
The brokerage estimates the tube company’s revenue/EBITDA/PAT/CAGR at 15 percent/35 percent/40 percent over the financial years 2023 to 2025. The stock is valued at 33 times the FY25E earnings per share (EPS).
Motilal Oswal views APL Apollo Tubes as a leader in its industry and expects the company to take the lead and make the most of the growing structural tube market.
The structural steel tube manufacturer is estimated to undergo growth on the back of factors including a rising demand across segments, increased product penetration with the help of a robust distribution network, an increase in the share of VAP, thereby driving margins, the introduction of Apollo Mart, and the company’s strong leadership position, Motilal Oswal observed in its note.
For the March quarter, APL Apollo Tubes posted a 23.8 percent rise at Rs 201.82 crore compared to Rs 163.01 crore in the year-ago period, and its net sales rose 5.13 percent to Rs 4,431.09 crore from Rs 4,214.73 crore in the same period last year.
Shares of APL Apollo Tubes ended 2.76 percent higher at Rs 1,167.05 on Monday.
