Apollo Pipes Ltd Q4 FY26 Earnings Analysis

- Q4 FY '26 volume target: 32,000-35,000 tons, aiming to close FY '26 at 106,000-107,000 tons vs. 99,000 tons in FY '25. - Expect high single-digit volume growth for FY '26 due to strong Q4 performance. - FY '27: Anticipate high double-digit volume growth driven by: - Varanasi plant ramp-up serving East Indian markets. - Kisan Mouldings volume increase (targeting 70% utilization from current 40% within 2 years). - New product lines like UPVC window and door frames. - Increased contribution from water tanks and CPVC segments. - Housing plumbing segment targeted to grow from 60% to 70-75% of sales in next 2 years. - Aggressive pricing strategy adopted to capture market share. - Expansion into West and East Indian markets expected to enhance revenue contribution. - Overall focus on Housing business with expectation of strong market demand revival.

- Apollo Pipes anticipates strong Q4 FY '26 sales volume growth, targeting 32,000-35,000 tons for the quarter, potentially closing FY '26 at 106,000-107,000 tons (vs. 99,000 tons in FY '25). - High single-digit volume growth expected for FY '26 after a challenging 9 months. - FY '27 projected to see high double-digit volume growth driven by capacity ramp-up at Varanasi plant, Kisan acquisition integration, and product additions. - Focus on increasing Housing Plumbing segment to 70-75% of sales mix, which has shown double-digit growth, enhancing margins. - EBITDA margins may see short-to-medium-term pressure due to aggressive market share expansion and pricing strategies but expected to recover with operational leverage and better pricing. - Kisan Mouldings plant aims to improve utilization from ~40% to 70% in two years, aiding profitability. - Other income stable at Rs. 50-60 lakhs quarterly (excluding asset sale gains). - Strategic investments and capacity expansion expected to drive sustained earnings growth without additional debt.

- FY '26 CAPEX: Rs. 150 crores (Rs. 125 crores in 9 months + Rs. 25 crores in Q4) - FY '27 CAPEX Budget: Around Rs. 75-100 crores including: - Rs. 25-30 crores to acquire land for South India plant - Rs. 50 crores for ongoing expansions (new lines and brownfield) - Potential Rs. 25-30 crores additional for Kisan plant modernization - Kisan Plant: Planned Rs. 30-40 crores investment over next 2 years to modernize and increase capacity by 15-20% - New Plant: Varanasi plant expected to commence operations soon, targeting incremental sales in Eastern India - Focus on building Housing Plumbing capacity to 75% of sales mix, with investments aligned accordingly - No new debt planned for capacity expansion; funding through warrants exercise and internal accruals

- No new fundraising through debt or equity is currently planned or ongoing. - The Company raised Rs. 110 crores via warrants in April 2025; 25% has been received upfront. - The remaining 75% of warrant money is due by October 2026; the investor is committed to this. - No plans to increase promoter shareholding beyond 50% as of now. - CAPEX for FY '27 is planned around Rs. 75 to 100 crores funded through internal accruals without adding debt. - Land acquisition and brownfield expansion form major parts of this CAPEX. - Overall, the Company is committed to expanding capacity without adding any new debt.

- There was no explicit mention of the exact current or expected orderbook/pending orders during the call. - Management highlighted that government infrastructure demand remains muted with slow government CAPEX for water infrastructure over the last 24 months. - Payment clearance for existing government projects is awaited, impacting revival. - The company is not heavily relying on government demand for FY '27 and FY '28. - Focus is more on Housing Plumbing segment, which is growing and expected to expand from 60% to 70-75% of sales. - Seasonality and real estate project closures in Q4 are expected to drive volume growth and sales traction. - Capacity additions such as the new Varanasi plant starting soon and integration of Kisan are expected to drive demand and volumes. - Strong sales momentum seen in the last 6 weeks of December and January with 25% volume growth, boosting confidence for Q4.