Apollo Pipes Ltd. has announced its first quarter financial results of fiscal year 2027 with a net loss of ₹2.5 crore, which is lower than the net profit of ₹12.5 crore in the corresponding quarter last year. The bottom line crash was mainly due to the negative and volatile polymer prices in the quarter, which impacted the company's operating performance strongly. In spite of the poor earnings, the piping solutions company had a moderate top-line growth, with revenue from operations up 7.4% year-on-year to ₹295 crore and from ₹275 crore in the previous quarter.
But the company’s operational profitability took a hit as margin pressures intensified. EBITDA (earnings before interest, tax, depreciation and amortisation) slipped 85.3% year-on-year to ₹3.03 crore and dropped from ₹20.7 crore in the same quarter last year. Consequently, the EBITDA margin shrank drastically from 7.52% to a thin 1.03%. Sales volumes also slipped a bit along with it (3% year-on-year decline to 24,477 tonnes) in line with the cautious mood in the market.
Talking about macroeconomic headwinds, Managing Director Sameer Gupta stated that PVCs in general experienced severe disruption from the extreme volatility of polymer prices in the quarter. A sharp price correction in April caused much hesitation among channel partners who would have to hold off on new purchases and sell off large inventories. This cautious approach led to a relatively weak end-consumer demand from home plumbing and bath fittings.
The management is optimistic about a robust rebound in the future. Gupta said that business activity and volume growth should get a boost in the quarters to come as distribution channels normalize inventory levels and demand gradually recovers. As PVC prices are now showing signs of stabilization, Apollo Pipes expects to be much better off in the second half of FY27.
The company has a robust pipeline of new and value-added products to support long-term growth. Apollo Pipes looks to expand its total annual manufacturing capacity from 240,000 tonnes to 288,000 tonnes over two years. Most notably, the management confirmed that this capital expansion will be paid for entirely from internal cash flow generation, so that the balance sheet is fully unleveraged.
For the remainder of FY27, Apollo Pipes has identified some of the core agenda areas such as expansion in the pan-India market, maximizing utilization of existing plants, expansion in adjacent markets across Central, Western and Eastern India, and brand building. In line with these strategic goals, the company is going to target a compound annual growth rate of more than 25% in revenue in three years and continues the long-term target to grow faster than this in terms of the CAGR. Investor sentiment remained strong on the share market and Apollo Pipes shares were up 0.95% at ₹505 on NSE on Thursday despite the quarterly loss.
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