APOLLOPIPENSEAugust 12, 2025

Apollo Pipes Limited

6,339words
84turns
14analyst exchanges
5executives
Management on call
Sameer Gupta
CHAIRMAN AND MANAGING DIRECTOR, APOLLO PIPES LIMITED
Arun Agarwal
JOINT MANAGING DIRECTOR, APOLLO PIPES LIMITED
Ajay Kumar Jain
CHIEF FINANCIAL OFFICER, APOLLO PIPES LIMITED
Anubhav Gupta
GROUP CHIEF STRATEGY OFFICER, APOLLO PIPES LIMITED
Anshika Patnaik
SYSTEMATIX INSTITUTIONAL EQUITIES
Key numbers — 40 extracted
15%
oduct Mix – We are increasing our product focus on CPVC pipes, which is currently contributing to 15% of our volume. We are in advanced discussions with a leading raw material supplier to create a jo
Rs. 70 crore
expenditure front – we continue to invest in building long-term capacity. We incurred a CAPEX of Rs. 70 crores in Q1, following a spend of Rs. 166 crores in FY '25. We remain committed to expanding our total
Rs. 166 crore
in building long-term capacity. We incurred a CAPEX of Rs. 70 crores in Q1, following a spend of Rs. 166 crores in FY '25. We remain committed to expanding our total installed capacity to 2,86,000 tons over
rs,
We remain committed to expanding our total installed capacity to 2,86,000 tons over the next 2 years, without adding any debt to our books. Our working capital cycle has remained disciplined at 38 day
4%
e onset of early monsoons, the quarter got washed out. And on Y-o-Y basis, our volume is lower by 4% on console basis. As we are into the current quarter, July-August, things are slightly better tha
16%
is to boost our product mix in terms of CPVC contribution, which has been stagnant at around 15%-16% for the last 2-3 years, we have tied up with one of the largest raw material manufacturers of CPV
60%
. Good afternoon. So, see, if you look at our housing segment today, right, it contributes around 60% to our overall revenue, which used to be like 40% 5 years back. Then it moved to 45%-50% 2-3 year
40%
ing segment today, right, it contributes around 60% to our overall revenue, which used to be like 40% 5 years back. Then it moved to 45%-50% 2-3 years ago. And now, today, it is at 60%. And as all th
45%
tes around 60% to our overall revenue, which used to be like 40% 5 years back. Then it moved to 45%-50% 2-3 years ago. And now, today, it is at 60%. And as all the new products we have added to our
50%
around 60% to our overall revenue, which used to be like 40% 5 years back. Then it moved to 45%-50% 2-3 years ago. And now, today, it is at 60%. And as all the new products we have added to our por
70%
will keep on improving towards housing segment, right. So, eventually, it should settle at around 70% or 75% in next 3-4 years. Now, this smart metering, yes, we are hearing a lot of noise, right, fr
75%
ep on improving towards housing segment, right. So, eventually, it should settle at around 70% or 75% in next 3-4 years. Now, this smart metering, yes, we are hearing a lot of noise, right, from the
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Guidance — 17 items
Sameer Gupta
opening
“Our working capital cycle has remained disciplined at 38 days and we anticipate further improvement as operational efficiency scales up.”
Sameer Gupta
opening
“Looking ahead, we expect a more favorable demand environment starting from September onwards as construction activities are likely to resume post-monsoon.”
Aryaman Agarwal
qa
“So, in the coming year, I was wondering how the volume would pick up in the PVC industry, look like the previous year was dull for the industry and how do you expect the competition to be?”
Aryaman Agarwal
qa
“In the coming year, how would the volumes for PVC industry pick up, look like the previous year was dull for the industry and how do you expect the competition to be?”
Anubhav Gupta
qa
“Now, whether it is low double-digit, mid double-digit, I think things will be more clear how quarter 2 pans out.”
Anubhav Gupta
qa
“Maybe in next 3-4 months, we will be in position to tell you that how this segment is going to pan out, what are the government commitments to focus on this segment, because what we have seen is that, unless there is a mega push from the government side, to encourage household owners to go for smart metering, etc., things will not move, right.”
Sneha
qa
“Given there is current weakness in demand and of course, we are hopeful of government spending picking up and things improving, would you like to give some guidance for this year in terms of volume growth, both Kisan and Apollo put together along with some margins improvement?”
Anubhav Gupta
qa
“We will be clear that how Q2 pans out, right.”
Anubhav Gupta
qa
“And the industry may, and we expect that to achieve in next 3-4 years.”
Anubhav Gupta
qa
“And then once industry gets, like in a better mode, which we expect, say, next 6-9 months, then we will take a call to see if we have to go for a Greenfield plant in South India, which is definitely in our wish list.”
Risks & concerns — 11 flagged
The sector faced significant headwinds due to weak end-user demand and heightened volatility in raw material prices.
— Sameer Gupta
On top of this, the frequent and sharp fluctuation in PVC resin prices triggered cautious behavior and continuous destocking by our channel partners.
— Sameer Gupta
As a result, Apollo Pipes experienced a flat year-on-year performance in consolidated sales volume, and our margins were under pressure due to low capacity utilization and heightened competition across the sector.
— Sameer Gupta
But I think one of the biggest challenges what we are seeing is the overall slowdown in the government spends towards the infrastructure.
— Anubhav Gupta
When we look at the quarter 1 results from cement, tiles, structural steel pipes, plywood, like all those sectors, so everyone is facing the heat of slowdown in the government spending.
— Anubhav Gupta
3 a kilo if you look at like 1st April versus 30th June, so some decline in the NSR definitely because of low resin prices.
— Anubhav Gupta
So, there is a pressure on all of us as a sector to ramp up the capacity.
— Anubhav Gupta
Of course, there is competition, there is PVC price pressure.
— Sneha
It is just a kind of, I would say, a weak, bad phase, which will go away, because this stress in the industry and players are selling below their cost, those smaller, weaker players will vanish and then with the demand coming back, the supply would be trimmed.
— Anubhav Gupta
And that is why this decline in the EBITDA spreads for the companies in last 7-8 quarters, you would see, right, including the leaders.
— Anubhav Gupta
So, definitely, there is a lot of stress, right?
— Anubhav Gupta
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Q&A — 14 exchanges
Q
So, in the coming year, I was wondering how the volume would pick up in the PVC industry, look like the previous year was dull for the industry and how do you expect the competition to be?
Management
Q
Is this better now?
Management
Q
In the coming year, how would the volumes for PVC industry pick up, look like the previous year was dull for the industry and how do you expect the competition to be?
Anubhav Gupta
Hi, Aryaman, good afternoon. This is Anubhav here. So, if you look at FY '26, how it is panning out, Q1 was obviously, I would say, pretty much washed out. April started on a good note. It did continue in May, but then by the time June came because of the onset of early monsoons, the quarter got washed out. And on Y-o-Y basis, our volume is lower by 4% on console basis. As we are into the current quarter, July-August, things are slightly better than Q1, assuming that since monsoon came early, it will go early as well. And we are already seeing that some of the construction sites are being clea
Q
Yes, good afternoon to the Apollo Pipes team. And my question is specifically to Mr. Anubhav Gupta. Is Mr. Anubhav Gupta online?
Anubhav Gupta
Yes, please go ahead. Yes, sir. So, I have a telescopic question for you. Going ahead, looking forward, how is Apollo Pipes planning to expand its footprint into housing and infrastructure? And are you planning to integrate smart metering, IoT-enabled plumbing systems, or recycled polymer solutions into your product roadmap in the next 5-10 years? And do you think this could possibly help Apollo Pipes position itself as a sustainability-driven leader in the next-gen water management? Yes, thank you. That was my question. Hi Sujit. Good afternoon. So, see, if you look at our housing segment tod
Q
Hello. First of all, what is the CPVC contribution going ahead for 15%?
Anubhav Gupta
Bharat, can you please repeat your question? Yes, one second. What is the CPVC contribution going ahead like current 15%? So, with all the efforts what we are putting in to boost our CPVC sales, we are highly confident that the contribution will improve above 20% in next 1-2 years versus 15% today. Fine. Thank you. That is it from my end.
Q
Yes. Hi, team. Good afternoon. Thank you for taking up my question. Can you please explain in Apollo Pipes on a standalone basis, though we have maintained the volumes Y-on-Y, but that realization has taken a sharp knock. So, is it purely because of resin or would you like to elaborate more on the competitive intensity, please?
Anubhav Gupta
So, there are both factors. Yes, one is that reason is down by Rs. 2-Rs. 3 a kilo if you look at like 1st April versus 30th June, so some decline in the NSR definitely because of low resin prices. And yes, the competitive intensity is high at the moment because demand is sluggish and each of the PVC pipe companies has increased the capacities in last 2-3 years. So, there is a pressure on all of us as a sector to ramp up the capacity. So, we are seeing that players’ right from the top leader to mid-Tier or the low-Tier, right, people are going very aggressive on reducing the selling prices just
Q
Hi. Good afternoon team and thanks a lot for the opportunity. Just a couple of questions here. Given there is current weakness in demand and of course, we are hopeful of government spending picking up and things improving, would you like to give some guidance for this year in terms of volume growth, both Kisan and Apollo put together along with some margins improvement?
Anubhav Gupta
Sneha, we did mention that we are looking for double-digit growth, definitely, now in terms of volume. This is like low double-digit, mid double-digit. We will be clear that how Q2 pans out, right. And what we can tell you is that we are ready for high double-digit growth, also correct for the rest of the 8 months. But yes, a lot will depend on how macro pans out. But worst case, we would be growing our sales volume by double-digit, low to mid double-digit. And what about the margins? Where do you see margins going? Because of course, we have been speaking about going to double-digit margins a
Q
Hi, thanks for taking my question. So, I have two questions. First being about the sales volume. So, while we had a slightly negative sales volume Y-o-Y, other PVC players have done, what do you say, flattish to positive growth. So, is there a reason why our company has, what do you say, de-grown slightly? Is it geography specific or is it just general overall?
Anubhav Gupta
So, Yog, if you look at the mild sales volume, which our competitors have delivered, you would also see that their margin in terms of rupees per kg, that has also fallen very sharply. So, it is clearly visible that the competitors are reducing their NSR and compromising on margins way too much to demonstrate or to try to gain sales volume growth. So, which we at some point stopped, because we are sure that so one is that our fixed costs are under control. It is not that we have too much of high fixed costs, so that we have to push our volumes way too much, where we keep on compromising on our
Q
Hello.
Management
Q
Hi, team. Thanks a lot for the follow-up opportunity. I just wanted to deep dive a bit into your CAPEX. You have been into the CAPEX mode for quite some time now. What is the CAPEX which is likely to get completed this particular year? And with the total gross block, where can you see your topline? And similarly, the second part of the question would be, you have been mentioning about higher competitive intensity, which is leading to, of course the volumes not being achieved for a while now. I just wanted to understand when do you see this competitive intensity easing out? You also mentioned t
Anubhav Gupta
Thanks, Sneha. So, coming to the first part, which is for the CAPEX commitments we have, right, so today we are at a capacity of around 230,000 tons, right? And in our current business plan, we will take it to 285,000 tons. Now, the residual CAPEX to achieve this is around Rs. 100 crores. In Q1, we already spent Rs. 68-Rs. 69 crores, correct? And in rest of 3 quarters, we should be another Rs. 70-Rs. 80 crores. And when we enter into FY '26, some residual Rs. 30-Rs. 40 crore may be left over. So, one is that. And then once industry gets, like in a better mode, which we expect, say, next 6-9 mo
Q
Sorry, I have been trying to talk, but there is an issue.
Management
Q
Hi, sir. Thank you for the opportunity. How do you see the ROCE calculation now assuming that PVC prices move up by Rs. 5-Rs. 6, even if any of these 1 BIS or ADD come through by the year-end?
Anubhav Gupta
Yes. So, Karan, see, ROCE is something what we see, right? Optically, it is like very low and very concerning for us, right? But one thing, what makes us confident that at least we are on the right track, to achieve the desired ROCE levels, upward of like above 20%, which we have always maintained. So, why it is low today is that we have invested almost like Rs. 800 crores in gross block today and Rs. 200 crores is our working capital. So, Rs. 1,000 crore is what our capital employed today, near about. And it is generating revenue of around Rs. 1,200-Rs. 1,300 crores with EBITDA of Rs. 90- Rs.
Q
Good afternoon to the team. Sir, could you highlight more on how our order book is panning out on the UPVC door and window segment? How has the response been? And secondly, also on the newer products that we are looking at, like specially DWC pipes or some of the newer products that we are trying to get into, if you could elaborate a little more on that as well?
Anubhav Gupta
Yash, UPVC, we just started the commercial production, right? I mean, 15 days ago, you must have looked at our press release. So, right now, we are at a point where we are going and aggressively pitching this product to the key stakeholders, which are mainly contractors, real estate companies and government agencies. It requires a lot of approvals, right. So, order booking is building up, right. For the full year, we should be doing kind of Rs. 50 crores kind of revenue from this vertical. But most of this will come in like second half. Q2 will not be a significant number. But what we can tell
Q
Thank you all for taking the time out to join us on this call. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about the company, please feel free to contact our team. Thank you once again.
Management
Speaking time
Anubhav Gupta
27
Moderator
16
Sneha
6
Yog Rajani
6
Udit Gajiwala
5
Karan B
5
Aryaman Agarwal
4
Sujit D Patil
4
Bharat Kumar
3
Yash Modi
3
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Opening remarks
Anshika Patnaik
Thank you. On behalf of Systematix Institutional Equities, we welcome you all to the Q1 FY '26 Conference Call of Apollo Pipes Limited. From the Management side, we have Mr. Sameer Gupta - Chairman and Managing Director; Mr. Arun Agarwal - Joint Managing Director; Mr. Ajay Kumar Jain - Chief Financial Officer; Mr. Anubhav Gupta - Group Chief Strategy Officer. I will now hand over the call to CMD sir, Mr. Sameer Gupta for ‘Opening Remarks’. Over to you, sir.
Sameer Gupta
Thank you. Good afternoon, everyone. This is Sameer Gupta - CMD of Apollo Pipes. I have joined today with Mr. Arun Agarwal – JMD; Mr. Ajay Kumar Jain - CFO, and Mr. Anubhav Gupta - Group CSO. I would like to extend a warm welcome to all of you to our Q1 FY '26 Earnings Call. As I shared in our previous interactions, FY '25 was one of the most challenging years for the PVC pipe industry. The sector faced significant headwinds due to weak end-user demand and heightened volatility in raw material prices. Unfortunately, these pressures continued for the 1st quarter of FY '26. The sector was impacted primarily due to breakdown in both the private real estate sector and government infrastructure spendings. On top of this, the frequent and sharp fluctuation in PVC resin prices triggered cautious behavior and continuous destocking by our channel partners. As a result, Apollo Pipes experienced a flat year-on-year performance in consolidated sales volume, and our margins were under pressure due
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