Thread by @ValueEducator

#apollopipes FY 22 Annual Report Highlights

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Apollo Pipes is among the top 10 leading piping solution providing companies in India. With more
than three decades of experience in the Indian Pipe Market,

Apollo Pipes holds a strong reputation
for high quality products and an extensive distribution network.

The Company’s expansive product profile includes over 1,500 product varieties of CPVC, UPVC, and
HDPE pipes, water storage tanks, PVC taps, fittings and solvents of the

highest quality. The products
cater to an array of industrial applications such as Agriculture, Water Management, Construction,
Infrastructure, and Telecom ducting segments

Apollo Pipes maintains a strong distribution network of 600+ channel partners and

10,000+ customer touch points.

Equipped with state-of-the-art infrastructure, the Company operates large manufacturing facilities
at Dadri and Sikandarabad in UP, Ahmedabad – Gujarat, Tumkur – Karnataka and RaipurChhattisgarh
with a total annual capacity of 125,200 MT

1. Industry Updates
Real estate sector is expected to gain momentum over the coming years.

Various factors such as reverse migration, flexible work options, learning from home and the
desire for ample open and green spaces have turned the tide in favour of Tier 2 & 3 cities

These factors should sustain demand for pipes and fittings over the coming years.

The Government has launched a novel scheme titled ‘Har Khet Ko Pani under PMKSY’ to
facilitate irrigation coverage for every farmer and improve irrigation efficiency with an end-
to-end solution

for the creation of source, distribution, field application and application
activities

This thrust on irrigation is expected to generate interesting opportunities for the PVC pipes
segment over the medium term

2. Financials

Apollo Pipes have registered all-time high numbers across key financial parameters

Revenue: 784.1 crore (51% YoY increase)

Sales Volume: 53849MT (14% YoY increase)

Operating cash flow: 36 crore (71% YoY increase from 21 crore in FY 21)

EBITDA: 93.4 crore (26% YoY increase)

This growth was primarily owing to the significant jump in sales of CPVC and HDPE products.
The fittings piece also made a healthy contribution to the revenue growth.

The EBITDA margin – it dipped from 14% in FY21 to 12% in FY22.

This dip was owing to a surge in costs – raw material, power and fuel and logistics cost.

Return on Capital Employed stood at 16.5% which is the highest in the last five years.

Apollo focused on selling our value-added products namely CPVC, HDPE pipes and fittings.

Company worked extensively on widening its product basket in the fitting space which
yielded good returns.

Company’s products received healthy traction, which is rewarding because it heralds
superior profitability over the coming years when crude oil prices cool down.

3. Increase in Raw material Costs
As crude oil prices scaled significantly, Apollo Pipes’ raw materials and logistics costs
increased significantly.

Moreover, the increase in the team size owing to the commissioning of the Raipur facility
upped the employee bill considerably.

Hence, despite an increase in profit numbers, margins slid.

4. Capex Updates:
FY22 was a special milestone for Apollo Pipes as the company commenced operations of its
Raipur unit which is their most sophisticated unit in terms of technology and efficiency.

The company will now be able to imprint a strong foothold in East and Central India.

The commissioning of the unit also means that Apollo Pipes now enjoy a pan-India
manufacturing presence which gives them a unique competitive advantage – to reach
markets faster in a

cost-effective manner.

The Company progressed well with its brownfield expansions at its three facilities at Dadri,
Ahmedabad and Tumkur. These, when commissioned, will further strengthen the growth
momentum of the company going forward

Capex for FY22 was 39cr. Apollo Pipes is planning additional capacity for plastic bath fittings
in FY23.

5. Branding Spends

Apollo engaged with the Bollywood celebrity, Tiger Shroff, as the brand ambassador for the
entire Group.

Company also appointed Raveena Tandon as Brand Ambassador.

Social Media campaign launched in Q3FY22 continue to garner good response.

They developed TV advertisements which were aired on all National News TV channels.

Company also intensified its presence on all social media platforms and Below-the-Line
initiatives. These efforts have helped the company to generate traction for its products.

6. Focus areas for 2023:
Strengthen foothold in existing markets of North, West and South India

Undertake a phase-wise capacity expansion at the existing facilities over the next few quarters

Register solid growth in sales–targeting revenue growth of around 25%

Penetrate and establish footprint into neighbouring markets in Central and Eastern India

Improve utilization at the existing manufacturing plants at all facilities

Undertake various brand building exercises and establish stronger brand recall in the
established markets of North and Western India

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