Apar Inds.

Apar Industries commenced FY26 with robust financial results, reporting a 27.3% year-on-year increase in revenue to ₹5,104 crores. This strong top-line growth translated into a 27% rise in EBITDA to ₹501 crores, maintaining a healthy margin of 9.8%. Profit After Tax (PAT) also saw a significant 30% year-on-year jump to ₹263 crores, with a PAT margin of 5.2%, primarily propelled by strong domestic business performance.

The Conductor Division was a key growth driver, with revenues soaring by 43.9% year-on-year, supported by an approximate 18% volume growth. The division's premium product mix contributed 43.5% to its sales, up from 37.1% last year, and US revenues alone grew by 83% over Q1 FY25. New orders totaling ₹3,135 crores were secured this quarter, bringing the current order book for the division to a strong ₹7,779 crores, with an EBITDA of ₹43,688 per metric ton.

The Cable Segment posted a 36.3% year-on-year revenue growth, reaching ₹1,419 crores, largely due to a strong export performance where US revenues surged by 136% year-on-year. Exports now account for 41.3% of the segment's mix. EBITDA for the segment grew 32.2% to ₹142 crores, maintaining a margin of approximately 10%. For new contracts, Apar is strategically pricing tariffs as a line item, with changes borne by the client, to mitigate risk from uncertain US import duties.

Despite flat revenues year-on-year, primarily attributed to lower average prices of crude gas oil and derivatives, the Oil Business achieved an 8.1% year-on-year volume growth. Domestic transformer oil volumes increased by approximately 20%, while automotive oil and industrial lubricants also grew by 8.4% and 15.9% respectively. The export mix temporarily declined to 36.7% from 45% last year due to project delays in key markets like Saudi Arabia, South Africa, and Australia, but is expected to reverse as execution picks up.

India's renewable energy sector demonstrated robust growth, with 7.3 gigawatts of renewable energy added in June 2025 alone. However, transmission line additions in Q1 FY26 were significantly below target, achieving only 1,031 circuit kilometers (17% of the planned 6,000 km) due to early monsoons and right-of-way issues. Management anticipates a strong pent-up demand for conductors and cables as these issues are resolved, with a full-year target of 24,400 circuit kilometers for FY26.

Apar Industries is executing a planned CAPEX of ₹1,300 crores by June 2026, with ₹150 crores already incurred in Q1 FY26 and an additional ₹350 crores expected to be spent by October. A significant portion of this investment, approximately ₹300-400 crores, is allocated for expanding conductor capacity. New conductor capacity is anticipated to come online in Q3 and early Q4, addressing the current full utilization of most conductor product lines and preparing for future opportunities.

The company acknowledges geopolitical tensions and US tariff uncertainties as its biggest worry, particularly the 50% Section 232 tariffs on basic materials like aluminum and copper, which could impact local US manufacturing. While India's reciprocal tariffs are expected to be competitive, subsidized Chinese exports (8-12%) continue to pose headwinds in non-US markets. Apar is actively monitoring the situation, expecting more clarity soon, and remains flexible in its product mix to adapt to evolving trade dynamics.

Apar is undertaking initiatives to consolidate its oil storage operations, moving away from rented third-party tanks. This strategic move is justified by the payback from external storage cost savings and aims to improve the quality of base oil storage. Furthermore, this consolidation opens up the possibility of exporting products in bulk, a new avenue for the oil business that could enhance efficiency and market reach.