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 ankit shah's Stock Idea
Ankit shah is Bullish on APL Apollo Tubes Ltd.
Idea Submitted on 06Dec,2018
  • 5 Total Ideas
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  • 5 Closed Ideas
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      Buy APL Apollo Tubes Idea
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      Idea Status :  Closed
    Stop Loss Triggered
    Idea Closed at 1141.35 (24Dec,18 02:20:pm)
     Time Frame
     Start Price
     Target Price
     Stop Loss
     Projected Gain
    104 (8.02% Upside)
     Returns Achieved
    -154.65     -11.93%
    Key Investment Rationale: H2FY19E to better than H1FY19, however slowdown in real-estate & construction remains a worry point Competition and higher input cost to cap margins Acquisition of Apollo Tricot Tubes to bring synergies but may take time to fructify Promoter infusion should bring down debt but dilute the earnings and return ratios Valuations & View: We believe while H1FY19 was tough, H2FY19 could see some pressure easing. However, slowdown in real estate could further impact demand for company’s products. We also await the benefits of DFT as they are yet to kick-in, while recent acquisition of Apollo Tricoat would open up chances of synergies but we expect the synergies would be gradual in nature and not immediate. Promoters’ infusion is likely to bring down Debt (0.92 in FY18 to 0.63 by FY20E) but would be earning dilutive in near term, while return ratios are unlikely to touch mid twenties as we had expected earlier.  We have valued the stock at 10X EV/EBITDA on FY20E EBIDTA of INR 4,813Mn against the 5 year average EV/EBITDA multiple of 8x. We continue with the “BUY” rating on the stock with a Target price of INR 1400.
     Stock Price Movement (EOD Basis)
     C.M.P APL Apollo Tubes
    Buy Calls: 6 Sell Calls: 0
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