APL Apollo Tubes Ltd was incorporated in the year 1986. It is a Mid Cap company (having a market cap of Rs 5188.40 Crore) operating in Iron and Steel sector. APL Apollo Tubes Ltd has a vast business model across India. Its key Products/Revenue Segments include Black Pipes, Coils, GI Pipes, Galvanised Pipes, Scrap, and Export Incentives. APL Apollo Tubes Ltd. is the largest producer of Electric Resistance Welded (ERW) steel pipes including one of the largest section pipe & tube manufacturers in India. It has the capacity to produce more than 1.3 million tons per annum.
It caters extensively to the region and exports to over 20 countries globally. The company’s vast distribution network is spread across India with warehouses and branch offices in 25 cities. This vast distribution network enables it to be one of the leading Galvanised Iron (GI) pipe manufacturers in India. Here is the detailed fundamental analysis of APL Apollo Tubes Ltd.
APL Apollo-Fundamental Analysis
Fundamental analysis of APL Apollo Tubes Limited
| Fundamental Points | Numbers |
| Market cap | 3946.5 Crore |
| Debt: Equity ratio | 0.15 |
| Compounded sales growth | 36.64% |
| Compounded profit growth | 27.79% |
| Return on equity | 18.39% |
| P/E | 37.55 |
Annual Results [Consolidated Figure in Rs. Crores]
| 2014 | 2015 | 2016 | 2017 | 2018 | |
| Sales | 2,496.96 | 3,138.27 | 4,213.59 | 4,545.00 | 5334.77 |
| Expenses | 2,332.68 | 2,956.66 | 3,957.27 | 4,220.62 | 4963.73 |
| Operating Profit | 164.28 | 181.61 | 256.32 | 324.38 | 371.04 |
| Other Income | 2.04 | 4.51 | 10.27 | 3.78 | 5 |
| Interest | 60.93 | 66.44 | 69.51 | 68.33 | 81.30 |
| Depreciation | 16.43 | 22.01 | 34.10 | 51.20 | 53.41 |
| Profit Before Tax | 88.97 | 97.67 | 162.98 | 208.63 | 244.34 |
| Tax | 29.99 | 33.92 | 62.42 | 62.74 | 84.35 |
| Net Profit | 58.98 | 63.75 | 100.56 | 145.89 | 159.99 |
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If you are investing for the long term then you need to worry. You need to check the following points after its annual results,
Revenue – Revenue or net sales of a company should be constant for at least 5 years. You may check that the company has been generating sales growth annually during the last 5 financial years of at least 10%.
Net Profit – Net profit of a company increases at least 15% on a year-on-year basis.
Earnings Per Share (EPS) – EPS is to be and grow at the rate of 10% for the last 5 years.
Price to Earnings Ratio (P/E) – P/E ratio should be low as compared to the other peer companies active in the same industry.
Price to Book Ratio (P/B) – P/B should be low as compared to peer companies operating in the same industry.
Debt to Equity Ratio – A debt-free company is desirable. If not so the ration must be low to 0.10 or 0.25.
Return on Equity (ROE) – Should be greater than 20%
Dividend Yield – You can ensure about good dividend yield by the company.
Beta – Invest in stocks whose Beta is less than 1 which indicates that the share is theoretically less volatile than the market.
For more info read the following articles,
http://capitalante.com/how-to-pick-best-stocks-step-by-step/
http://capitalante.com/top-10-best-stocks-to-buy-in-india-for-long-term/
What are the risk factors involved with APL Apollo, if any for long term?