APL Apollo Tubes Slips as Q1 Volumes Miss Goal

Shares of APL Apollo Tubes fell on Wednesday, hitting a day low of Rs 1,750.10 on the NSE after weak Q1 sales volumes missed guidance.

Here is what happened. APL Apollo sold 7.45 lakh tonnes of steel tubes in the April to June quarter, down 6% from the same period last year, when it had sold close to 7.94 lakh tonnes.

That is a soft start to the year, especially since the company had guided for volume growth of 15% to 20% for the full year.

The company also introduced a new way of reporting its sales starting this quarter. Under this system, its flagship APL Apollo brand contributed close to 5.69 lakh tonnes, while its premium SG brand added another 58,686 tonnes.

Roofing products brought in 91,516 tonnes, and operations in the UAE added just under 26,000 tonnes. This softer quarter comes right after a strong March quarter.

Back then, the company had posted a 20.9% jump in net profit to Rs 354.4 crore, with revenue rising nearly 14% and operating margins improving as well.

Sales volumes had grown 9% year on year in that period. Interestingly, the stock did not fall right away on the news.

It actually touched an intraday high of Rs 1,799 earlier in the day, before investors seemed to reassess the numbers and the stock slipped into negative territory.

The stock closed at Rs 1,785.10 on the NSE on Wednesday, down 0.20% for the day. It has fallen close to 9% since the start of the year, though it remains up over 1% compared to a year ago.

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