APAR Industries Reports 77.7% YoY Profit Growth in Q1 FY27; Earnings Call Highlights Robust Margin Expansion and Record Order Book

What Happened ?

key details

Operational & Business Highlights:

• Consolidated revenue increased 29.1% YoY to ₹6,591 crore.
• EBITDA rose 62.7% YoY to ₹814 crore, with EBITDA margin expanding to 12.4%.
• PAT increased 77.7% YoY to ₹467 crore.
• Domestic revenue grew 36.9% YoY, while exports increased 12.4% YoY.
• Export contribution stood at 27.5% of total revenue.
• The Conductors division secured ₹5,245 crore of new orders during the quarter.
• Conductors order book reached a record ₹10,190 crore, with exports accounting for 56.8% of pending orders.
• Two major overseas utility contracts worth over ₹2,800 crore strengthened long-term revenue visibility over the next four years.
• Cable division order book increased to ₹1,925 crore, reflecting improving demand from the U.S. market.
• The Oil division recorded significant margin expansion despite lower sales volumes, supported by stronger realizations and improved product mix.

Division Highlights

Conductors:

• Revenue increased 19.9% YoY to ₹3,338 crore.
• EBITDA per metric tonne improved 22.3% YoY to ₹53,418.
• Premium product mix increased to 50.3% compared with 43.7% a year ago.
• Higher metal prices temporarily affected shipment volumes and customer order scheduling. 

Oil:

• Revenue grew 34.7% YoY to ₹1,701 crore.
• EBITDA surged 214.2% YoY to ₹329 crore.
• EBITDA margin expanded sharply to 19.3% from 8.3% last year.
• Auto oil volumes increased 6.6%, while industrial lubricant volumes grew 12.1%.
• Temporary disruption at the UAE facility due to the closure of Hamriyah Port affected quarterly volumes.
• A prudent accounting provision of ₹93 crore was created due to higher ICE gas oil prices. 

Cables:

• Revenue increased 29.5% YoY to ₹1,838 crore.
• EBITDA increased 36.7% YoY to ₹194 crore.
• Domestic cable revenue grew 59.9% YoY.
• The company reported improving order inflows from the U.S. market, supporting future growth visibility. 

Note:

• The earnings update demonstrates that APAR’s growth is increasingly supported by diversified business segments rather than a single product line.
• While temporary geopolitical disruptions affected certain export operations, stronger domestic demand, improving product mix and healthy order inflows continued to drive profitability and long-term growth visibility.

Risk Analysis

Summary:

• Despite strong earnings momentum, APAR remains exposed to commodity price volatility, geopolitical disruptions affecting exports, and fluctuations in global infrastructure demand.

Key Risks:

• Higher metal prices impacted conductor shipment volumes during the quarter.
• Temporary closure of Hamriyah Port in the UAE affected Oil division volumes.
• U.S. revenue declined across certain business segments.
• Commodity price movements may influence realizations and customer procurement cycles.
• Export demand remains subject to geopolitical and macroeconomic developments.

Worst Case:

• Prolonged geopolitical disruptions, sustained weakness in export markets or sharp commodity price volatility could affect execution of the company’s large order book and moderate future margin expansion despite healthy domestic demand.

Risk Level: Medium

Company Commentary

According to APAR Industries:

• Revenue increased 29.1% YoY, driven by healthy domestic demand and improved realizations.
• EBITDA margin expanded to 12.4%, reflecting better product mix and operational efficiencies.
• The Conductors division secured major international transmission orders worth over ₹2,800 crore.
• The Oil business delivered exceptional profitability despite temporary operational disruptions.
• Growing order books across Conductors and Cables provide strong revenue visibility for future quarters.