Thread by @tycoonmindset05

APL APOLLO Ltd, conducted their conference call today at 4:00 pm.

" New opportunities are been looked in warehouse, urban infrastructure, affordable housing and urban real estate to revolutionize construction industry. "

Here are the key takeaways 😁😁...

Business Report
- During FY21 company has given a very strong performance.

- They have increased their market share from 40% to 50% in structural steel tube sector.

- The merger of Apollo tricoat and app apollo is on track.

- This merger is expected to be completed by December, but final date will be decided by government.

- The date is also expected before end of next quarter.

-Company is constantly expanding its distributorship in key areas along with strong focus on mass branding.

-The contribution of value added products have increased from 40 to 60%.

- Company since FY12 has delivered about 21% CAGR in sales volumes.

- Even though with increase value products, volumes were not hampered much, distributor's inventory which was full were loaded out by then, and new demand came up, if it hadn't took place Companies volumes might have reduced.

- This value chain jump has been a 5 year journey.

- Lots of planning was done, it's not a one time situation and will maintain in future.

- With strong management, and high quality products with huge demand they are expected to deliver double digit growth in future.

- With suppliers, the company has good long term contracts with Tata and jsw steel like players. With steel low supply company has faced a resistance for the volume to be broken at highest level.

- Apart from that not much issue related to materials is been faced.

- Company is not afraid of lockdown they just want to grab the best opportunity when it comes.

- The company has been able to walk what they have said in last call.

- Tata pravesh and other , have different product offerings so no competition is present with them for now.

- Companies order book is less as of now, but they hare constantly in talks with state governments and railways with huge business opportunity.

- This deals are with contractors and the design is based on government.

Products
-From the 4 major business segments, majority of the sales volumes do come from Apollo structural.

-Majority of the companies products are used for building material housing, commerical property, 20% goes to infrastructure and others in industrial and agricultural unit.

- They are able to generate business from conventional construction products in both light and heavy structures due to their cost effective, higher strength and environment friendly product's.

- They are focused on high diameter tubes for now.

- At present company has 3 on going projects for hospitals and cold storage and are expected to be completed within 6 months.

Financials
- During the year, company has attained strong EBITDA and NET PROFIT levels.

- There has been surge in its operating cash flow levels from about 5 billion to about 10 billion rupees.

- During this period they have reduced debt by a huge margin to about 1.6 billion.

- Company at present has about free cash flow of 6.1 Billion.

- With such strong growth present in quarter as well, Company has been able to add more value addition to its portfolio.

-With their cash and carry model, they have reduced their net working capital from 25 to 8 days

- Major contributor for the growth in companies EBITDA/ton has been due to 4 factors.
1. Value addition
2. No discounting benefits
3. Cost control
4. Premium brand.

- Above debt reduction has also led to deduction in their interest cost by about 40%.

- Company will maintain good level of working capital and won't break so early in few quarters.

- In terms of steel price, Their products might have a difference of about 10000 per ton.

- At present Dividend plan will be regular and as with lots of things going in business

- They have delayed dividend for new.

- As they have a vision of 4 million tons by 2025, they will do whatever is important to attain it.

- There is a pass through of cost to customers if they key commodity (steel) is moved 5%+-, as it constitutes about 70% of product.

Capex
- Company has started its Capex to produce 500X500mm dia structural tubes and color coated tubes.

- It was fully funded from the companies internal cash flows.

- At present company still has about 10 Operating plants this has been maintained.

- Their first production will come in raipur plant by December. Various new addition are done in this plant.

- By Fy22, huge ton capacity is expected to be utilised, and the margins will be very better even compared to its value product's range.

- As of now, company is focused in their business only and has targets to attain their bigger targets. And has no plans for new acquisition.

- Promotion doesn't want to enter to the commodity specific business model again.

- Company is also helping govt for creating of hospital as well.

- Future Capex plans will be expected to be about 20 to 25% of their EBITDA margins.

- They target to achive 4 mill ton from 2 mill ton, and this is expected in next 2 3 years.

-Capex will be a mix of both brownfield and Greenfield expansion.

- For Tricoat, capacity will be at its best and it will gain materials from Companies raipur plant.

- The margins are higher the other segments and expected to be maintained and improve before merger is done.

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