APL Apollo Tubes: Motilal Oswal Recommends ‘Buy’ Rating with Huge Upside Potential

Synopsis: A structural steel tube maker shatters quarterly records across volume, profit, and margins – as foreign investors quietly raise their stake and a top brokerage puts 14% upside on the table.

India’s largest branded structural steel tube maker just delivered its best-ever quarterly performance across every key metric – volume, EBITDA, and net profit all hit all-time highs in Q4 FY26. Foreign institutional investors, who raised their stake from 31.78% in Mar 2025 to 37.52% in Mar 2026, appear to have anticipated this moment well in advance.

A Full Year That Rewrote the Record Books

APL Apollo Tubes Limited posted broad-based growth across all key operating metrics in FY26. Consolidated sales volume grew 11% year-on-year to 34.91 lakh tonnes, while revenue from operations rose 12% to Rs.23,079 crore. The standout performer was EBITDA, which jumped 50% year-on-year to Rs.1,802 crore, with EBITDA per tonne expanding sharply to Rs.5,161 from Rs.3,797 in FY25 – a 36% improvement that signals meaningful operating leverage kicking in.

Profit Surges, Balance Sheet Strengthens

Net profit for FY26 came in at Rs.1,203 crore, up 59% year-on-year from Rs.757 crore in FY25, driven by higher volumes, better realisations per tonne, and a steady decline in interest costs. Interest outgo fell 6% year-on-year to Rs.125 crore, even as the business scaled up significantly. The company also moved from a net cash position of Rs.305 crore in FY25 to Rs.1,532 crore in FY26 – a near fivefold jump -funded entirely through internal cash generation, with capital expenditure of Rs.652 crore fully met without any external borrowing.

Q4 Delivers All-Time Highs Across the Board

For Q4 FY26 specifically, the numbers were equally impressive. Sales volume for the quarter stood at 9.25 lakh tonnes, up 9% year-on-year and 1% sequentially. Quarterly EBITDA rose 24% year-on-year to Rs.511 crore, with EBITDA per tonne climbing to Rs.5,525 – up 14% from Rs.4,864 in Q4 FY25. Net profit for the quarter grew 21% year-on-year to Rs.354 crore. Return on equity for FY26 improved to 25.3% from 19.4% in FY25, while return on capital employed rose sharply to 37.3% from 24.5% – reflecting quality of earnings improvement, not just revenue growth.

Brokerage Bullish, Guidance Stays Confident

Motilal Oswal has maintained a Buy rating on the stock with a target price of Rs.2,250, implying roughly 14% upside from current levels, valuing the company at 35 times its FY28 estimated earnings per share. Management trimmed its FY27 volume growth guidance slightly to 15-20% from an earlier 20%, citing geopolitical uncertainty, but raised its EBITDA per tonne guidance from Rs.5,000 to Rs.5,500 – signalling confidence in pricing power and product mix even as volume visibility stays tempered. The company is also on track to expand total capacity to 8 million tonnes by FY28 through a combination of greenfield and brownfield additions.

About the Company

APL Apollo Tubes Limited is India’s largest branded structural steel tube manufacturer, headquartered in Delhi NCR. The company operates 11 manufacturing facilities with a total installed capacity of 5 million tonnes, spread across Uttar Pradesh, Karnataka, Tamil Nadu, Chhattisgarh, Maharashtra, and the UAE. It offers over 5,000 product varieties catering to housing, commercial construction, infrastructure, and agricultural applications, and distributes through a network of over 800 distributors across more than 300 towns and cities in India.

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