Strengthen your capabilities for the future with strong expansion plans

In everyday life, a conductor is like a bridge that connects electricity. It helps electricity flow smoothly from one place to another. Think of it as a power delivery pipeline, ensuring that everything gets to where it needs to go without a hitch. These conductors are used in all kinds of things, such as power lines, transformers, and even the wires that charge your cell phone.

Now let’s talk about Apar Industries. They are a large company that specializes in making these conductors. In fact, the company is known as the world’s largest aluminum and alloy conductor manufacturer. This means they create a lot of bridges for electricity!

But that’s not all about Apar. They have different parts of the business. It also makes specialty oils for a variety of industries, cables for power transmission, and cables for telephone and Internet connections. With countless years of experience, Apar is a trusted name known for quality and innovation.

The company’s stock has delivered impressive returns over the years. The stock has soared nearly 190% over the past year. It also produced multibagger returns of nearly 1,420% over three years of observation.

So, in this article, we will take a closer look at Apar Industries. We’ll find out what they’re doing, how they’re doing financially, and what their plans are for the future. Now, let’s learn more about this company and how they continue to move the world forward.

Apar Industries Corporate Overview

APAR industry It started in India in 1958. Sixty years later, the company has grown into a diversified billion-dollar company with operations in more than 140 countries as a highly trusted manufacturer and supplier of conductors, transmission cables, specialty oils, polymers and lubricants.

It is India’s first wire and cable company to enter the harness segment for various applications such as electric vehicles (EV), solar energy, locomotives, etc. The company exports to more than 140 countries around the world. Not only that, it is also a pioneer. transformer oil In India, the power transformer market share is over 60%.

Business segments of Apar industry

conductor

Apar Industries is a leading global conductor manufacturer. From FY 2016 to FY 2023, ₹433 crore was spent on strategic capital expenditure to launch innovative solutions in the sector.

The company has successfully embarked on an upgrade to reinvent its business with the addition of copper conductors for railways, copper transposition conductors for transformers, OPGW wires for power and telecommunications, a wide range of high-efficiency conductors and various aluminum alloys, including turnkey solutions. Special purpose rod.

In fiscal 2023, these premium products will account for 45% of sales. that much globalization Additionally, this strategy resulted in 51% of the revenue coming from outside the Indian market.

special oil

The company is the world’s third largest transformer oil manufacturer and India’s 10th largest lubricant seller. This gives the company an advantage in manufacturing and distribution economies of scale, which adds to the premiumization of the oil sector.

During the financial year 2016-23, the company invested ₹250 crore in high value-added items. In FY23, this category accounted for 32% of total sales.

cable segments

The company is the country’s largest renewable energy company and India’s leading exporter of cables and wires. The company is the country’s largest renewable energy company, offering one of the most diverse ranges of medium and low voltage XLPE cables, elastic cables, fiber optic cables and specialty cables.

During FY16-23, ₹397 crore was invested in developing new age solutions. In FY23, this segment accounted for over 23% of total revenue.

Finance of Apar Industries

In FY 2023, Apar Industries saw significant growth in its revenue, surging 54% to reach ₹14,352 crore compared to ₹9,316.57 crore in FY 2022. Analyzed over a four-year period from 2020 to 2023, the company recorded its revenue at a compound annual growth rate (CAGR) of 25%.

The increase in sales was due to growth in all business units driven by increased volumes in the cable and conductor business and increased exports.

At the same time, there has been a notable increase in net profit, growing by 148% from ₹256.73 crore in fiscal 2022 to ₹637.72 crore in fiscal 2023. Cumulative net profit recorded a CAGR of 68% over the four years from fiscal 2020 to fiscal 2023.

The significant increase in profitability was driven by higher margins on conventional conductors, an increased share of premium conductors, increased cable business, and increased overall exports.

In FY23, Apart Industries maintained favorable financial metrics with a return on equity (ROE) of 23.24% and a return on equity (ROCE) of 21.11%.

Future plans for Apar industry

Strong growth drivers remain intact

Despite facing some short-term challenges, such as the disruption caused by the Red Sea situation, APAR Industries Limited remains optimistic about its future performance.

The company believes that the long-term growth drivers it has been discussing over the past few quarters remain intact, enabling continued growth in the coming quarters.

solid order book

APAR Industries Limited’s carcass segment orders stood at a healthy INR 6,081 crores, with around 40% of the orders comprising premium products.

In the US market, a slowdown in order inflow was observed due to inventory rationalization, but this was offset by strong domestic demand. The company’s overall order book reflects healthy demand for its products and provides visibility into future revenue streams.

capacity expansion

To meet the expected increase in demand, APAR Industries Limited has been steadily expanding its production capacity across its business segments.

The company plans to invest approximately INR 30 billion in capital expenditure annually to de-bottleneck existing facilities, undertake brownfield expansion and set up new greenfield plants.

This addition of production capacity will enable APAR Industries to meet the growing demand for its products in both domestic and international markets.

Positive outlook across sectors

APAR Industries Limited expects its conductor business to grow by around 15% in volume terms in the coming financial year, driven by the shift from ACSR to AL-59 alloy conductors in the domestic market.

The cable business is targeting a growth rate of 20-25% thanks to increasing demand in fields such as wind power, solar power, railway, and defense.

Meanwhile, the transformer oil segment, the company’s primary petroleum product, is expected to witness double-digit growth, driven by the continued expansion of transmission and distribution infrastructure in India and abroad.

conclusion

With solid growth drivers, strong orders, capacity expansion, and a positive outlook across the sector, Apar Industries appears well-positioned for continued success. It will be interesting to see how the company capitalizes on future opportunities as it leverages its expertise and diverse products.

What do you think about Apar Industries’ future prospects? Do you think the company can maintain its impressive growth trajectory?

Written by Narine Surya

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