According to the brokerage, APL Apollo Tubes is the clear leader in India’s structural steel tubes market and is the best way to pay the category’s long growth runway.
The brokerage expects the organised structural tubes market to grow at a compound annual growth rate (CAGR) of 15% over financial year 2026 – 2030, driven by the rising steel penetration (6.5% for India compared to 9.5% globally), steady demand from real estate and infrastructure, substitution away from wood / RCC / sections and continued formalisation.
Volume Growth Prospects
The brokerage sees APAT as the best risk-adjusted play in building materials segment given its leadership, execution and relative valuation.
It expects the company to deliver 15% volume growth over FY26-28, driven by:
- Organic demand in real estate, infrastructure
- Capacity additions in new markets, products
- Richer product mix
- Exports
This could also help the company expand its EBITDA per tonne to ₹5,465 per tonne from the current ₹5,161 per tonne, resulting in 21% earnings CAGR, the brokerage said.BoFA Securities sees APL Apollo’s FY27 volume growth to be at 10% compared to its guidance of 15% – 20%, given the headwinds from the West Asia conflict. The brokerage believes the inflection in volume, particularly in the second half is likely to be a key catalyst for the stock.
Of the 21 analysts who have coverage on the APL Apollo Tubes stock, 19 have a “buy” rating and one each have “hold” and “sell” ratings.
Shares of APL Apollo Tubes are trading 2.1% higher on Monday after the brokerage report at ₹1,824.9. The stock is still down 7% so far this year.
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