Q1 2025 APL Apollo Tubes Ltd Earnings Call Transcript
Key Points
- Steel prices have decreased significantly, benefiting APL Apollo Tubes Ltd (BOM:533758) as India's largest steel buyer.
- The company has better negotiation power with steel suppliers due to increased steel capacity in the market.
- Gross margin spreads have improved, reflecting a better product mix from new plants in Raipur and Dubai.
- The company is expanding its capacity with new plants in Siliguri, Gorakhpur, and Ahmedabad, aiming for 5 million tons sellable capacity by FY27.
- The company maintains a strong market share in value-added and super value-added products, which are less affected by competition from scrap steel tubes.
- EBITDA spreads were weaker than expected due to non-recurring expenses such as ESOP and brand campaign costs.
- Falling steel prices bring challenges like industry de-stocking, heavy discounting, and potential inventory write-downs.
- Utilization levels at the Raipur and Dubai plants are still ramping up, with some segments operating below 60% capacity.
- The company faces competition from scrap steel tubes in the general product segment, which has limited growth in this area.
- There is uncertainty in the steel upstream sector, affecting margin expectations for Q2.
Ladies and gentlemen, good day and welcome to APL Apollo Tubes Limited Q1 FY25 earnings conference call hosted by Ambit Capital. (Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Kumar Saumya from Ambit Capital. Thank you and over to you, sir.
Thank you. Good afternoon, everyone. Welcome to the first quarter FY25 post-result conference call of APL Apollo Tubes. From the management, we have with us Mr. Sanjay Gupta, Chairman and Managing Director, Mr. Deepak Goyal, Director of Operations, Mr. Anubhav Gupta, Chief Strategy Officer, and Mr. Chetan Khandelwal, Chief Financial Officer.
Now I will hand over the call to the management for an opening remark post which will open the floor for Q&A. Over to you, sir.
Thanks, Kumar and thanks to Ambit Capital for hosting APL Apollo Tubes for its quarter one FY25 earnings call and thanks to all the
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