Concall AI

Apollo Pipes Limited — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Apollo Pipes faced a challenging Q1 FY26 with flat sales volumes and margin pressure due to weak demand, high competition, and raw material price volatility. Despite this, the company is executing a four-pronged growth strategy focusing on product portfolio expansion, improving product mix (targeting >20% CPVC contribution), West India plant ramp-up, and East India expansion with the Varanasi plant. Management expects demand to pick up from Q3 FY26 and aims for double-digit volume growth for the full year.

Highlights

Product portfolio expanded with new additions like PLB ducts, DWC pipes, PE gas pipes, PVC-O pipes, and UPVC doors/windows.
CPVC contribution targeted to improve from 15% to over 20% in the next 1-2 years.
Working capital cycle improved to 38 days, with a target of 30 days by end of FY26 or H1 FY27.
Total installed capacity committed to expand to 286,000 tons over the next 2 years without adding debt.
New plant in Varanasi on track to commence operations in coming months, strengthening East India presence.

Concerns

Consolidated sales volume was flat year-on-year in Q1 FY26, with a 4% decline on a console basis.
Margins were under pressure due to low capacity utilization and heightened competition.
Overall slowdown in government infrastructure spending and weak end-user demand impacted the sector.
Realization dropped by Rs. 2-3 per kilo in Q1 due0 to lower resin prices.

Key financials

2 periods

Headline

Consolidated Sales Volume Growth
-4%
YoY -4%
Working Capital Days
38 days
CPVC Contribution to Volume
15%
Housing Segment Revenue Contribution
60%
Agri Segment Revenue Contribution
40%

Q1 FY26

CAPEX
₹70 Cr

What they filed

Q1 FY27: revenue up 7.3%, net profit down 237.5% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	250	308	315	275	236 −6%	247 −20%	347 +10%	295 +7%
Expenses	231	285	291	254	220	235	329	292
EBITDA	19	23	24	21	16 −16%	12 −48%	18 −25%	3 −86%
Margin	8%	8%	8%	8%	7%	5%	5%	1%
Other income	1	0	3	3	5	1	1	2
Interest	4	3	2	2	3	2	3	3
Depreciation	11	12	12	12	14	15	15	15
Profit before tax	6	9	13	9	4 −33%	-5 −156%	1 −92%	-13 −244%
Tax rate	32%	26%	25%	11%	66%	-6%	110%	-12%
Net profit	4	6	10	8	1 −75%	-5 −183%	0 −100%	-11 −237%
EPS	1.01	1.41	2.22	1.85	0.37	-0.74	0.22	-1.95

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence

Capex ₹70 Cr entirely through internal cash flows without adding any debt
- Capacity expansion to 286,000 tons
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 the next 2 years, without adding any debt to our books.
Debt Debt disclosed

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.
Liquidity Liquidity disclosed Working capital cycle remained disciplined at 38 days, with anticipation of further improvement to 30 days by end of FY26 or H1 FY27, and sustainable 25-30 days.

Our working capital cycle has remained disciplined at 38 days and we anticipate further improvement as operational efficiency scales up.

Guidance & targets

Volume

Volume Growth Volume · FY26 · Medium confidence low to mid double-digit

So, we believe that for FY '26, we should be growing at double-digit in terms of volume. Now, whether it is low double-digit, mid double-digit, I think things will be more clear how quarter 2 pans out.

— Anubhav Gupta
Sales Volume Growth (Worst Case) Volume · FY26 · Medium confidence low to mid double-digit

But worst case, we would be growing our sales volume by double-digit, low to mid double-digit.

— Anubhav Gupta

Product Mix

CPVC Contribution to Volume Product Mix · next 1-2 years · High confidence above 20%

From 15% today

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.

— Anubhav Gupta
Housing Segment Revenue Contribution Product Mix · next 3-4 years · Medium confidence 70% or 75%

From 60% today

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 years ago. And now, today, it is at 60%. And as all the new products we have added to our portfolio, this mix will keep on improving towards housing segment, right. So, eventually, it should settle at around 70% or 75% in next 3-4 years.

— Anubhav Gupta

Market Share

Market Share Market Share · 3-4 years · Medium confidence 5%

From 2.5%-3% today

So, at Rs. 3,000 crore revenue with the industry size of like Rs. 50,000 crores, let us assume, right, our market share should be like 5%.

— Anubhav Gupta

Realization

Apollo Pipes Standalone Realization Realization · once capacities are utilized · Medium confidence Rs. 10,000-Rs. 11,000 a ton

From Rs. 9,000 a ton today

If you look at Apollo Pipes on standalone basis, it is at around Rs. 9,000 a ton and Kisan is at Rs. 4,000 a ton in Q1. Definitely, once the capacities are utilized further from Q1 levels, Apollo will go towards Rs. 10,000-Rs. 11,000 a ton, which we have been present at this level for many quarters now.

— Anubhav Gupta
Kisan Realization Realization · when sales pick-up · Medium confidence Rs. 7,000-Rs. 8,000 a ton

From Rs. 4,000 a ton today

So, we can hit Rs. 11,000 per ton in pipes standalone and Kisan has a lot of room to improve. We are just waiting for sales pick-up, revenue pick-up. Whenever it happens, Kisan will immediately jump towards Rs. 7,000-Rs. 8,000 a ton.

— Anubhav Gupta

Working Capital

Working Capital Cycle Working Capital · end of FY26 or H1 FY27 · High confidence 30 days

From 38 days today

You have seen that our working capital is getting better year-on-year. Right now, we are at 35-40 days. This will go towards 30 days of cycle, maybe by end of FY '26 or first half of FY '27 and it should remain between 25-30 days at a sustainable rate going forward.

— Anubhav Gupta

ROCE

Return on Capital Employed ROCE · 2-3 years · Medium confidence above 20%

From single digit today

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.

— Anubhav Gupta

Revenue

UPVC Doors/Windows Revenue Revenue · full year · Medium confidence Rs. 50 crores

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.

— Anubhav Gupta
Long-term Revenue Growth Revenue · long-term · Medium confidence 20%-25%

So, that is how we would be achieving 20%-25% of revenue growth on a long-term basis, Yash.

— Anubhav Gupta

What to watch in Q2 FY26

Volume Growth

next quarter (Q2 FY26)

Current Flat YoY, -4% console basis in Q1 FY26

Target Improvement towards double-digit growth

Why it matters

To confirm recovery from Q1 slowdown and progress towards FY26 double-digit volume growth target.

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... So, Q2 should be better than Q1 in that sense.

Risks & concerns

Weak End-User Demand
high

Weak end-user demand and slowdown in private real estate and government infrastructure spending impacted Q1 FY26 performance.

Management acknowledged
High Competitive Intensity
high

Increased capacities in the industry combined with sluggish demand led to aggressive pricing and margin pressure, with some players barely breaking even.

Management acknowledged
Raw Material Price Volatility
medium

Heightened volatility in raw material prices, particularly PVC resin, led to cautious behavior and destocking by channel partners.

Management acknowledged
Low Capacity Utilization
medium

Low capacity utilization contributed to margin pressure in Q1 FY26.

Management acknowledged

Q&A highlights

7 direct

Volume Growth Strategy & Competition Direct

So, we believe that for FY '26, we should be growing at double-digit in terms of volume. Now, whether it is low double-digit, mid double-digit, I think things will be more clear how quarter 2 pans out.

Management clarified their volume growth expectations for the year and their strategy amidst high competition.

Asked by Aryaman Agarwal

Smart Metering & Future Plumbing Partial

Next 5-10 years, yes, definitely, it may become a significant portion of the housing plumbing industry in India. But time is not right as of now. But we are keeping our ears on the ground what is happening there.

Revealed management's cautious but watchful approach to emerging technologies in the plumbing sector.

Asked by Sujit D Patil

CPVC Contribution Target Direct

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.

Provided a clear, quantified target for a key high-margin product segment.

Asked by Bharat Kumar

Realization Drop & Competitive Intensity Direct

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.

Explained the reasons behind the realization drop and the current competitive landscape.

Asked by Udit Gajiwala

Market Share & Warrants Direct

So, that way, our market share is around 2.5%-3%, Yog... So, at Rs. 3,000 crore revenue with the industry size of like Rs. 50,000 crores, let us assume, right, our market share should be like 5%.

Management provided current and target market share figures and clarified the strategic use of warrants for CAPEX funding.

Asked by Yog Rajani

CAPEX Plan & Competitive Landscape Direct

So, I think it is just a matter of a few quarters that we will see a lot of cleanups in the sector. And after that gets cleared up, we will be like, a few of the large ones and strong medium ones who will be again controlling the market.

Management detailed the remaining CAPEX and offered a strong view on the future consolidation of the competitive landscape.

Asked by Sneha

ROCE Improvement Direct

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.

Management addressed concerns about current low ROCE and provided a clear target and timeline for improvement.

Asked by Karan B

UPVC Doors/Windows & New Products Direct

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.

Provided specific revenue guidance for the newly launched UPVC segment and explained the strategic rationale for new product introductions.

Asked by Yash Modi

3 min read 6 chapters

Detailed narrative

Challenging Q1 FY26 Performance Amidst Sector Headwinds

Apollo Pipes experienced a flat year-on-year consolidated sales volume in Q1 FY26, with a 4% decline on a console basis. This performance was attributed to significant headwinds in the PVC pipe industry, including weak end-user demand, heightened raw material price volatility, and a slowdown in both private real estate and government infrastructure spending. Consequently, margins were under pressure due to low capacity utilization and intense competition across the sector.

Strategic Product Portfolio Expansion and Mix Improvement

The company expanded its product range by adding PLB ducts, DWC pipes, PE gas pipes, PVC-O pipes, and foraying into UPVC doors and windows. These strategic additions aim to diversify into adjacent high-growth sectors and contribute 5-10% to overall revenue, supporting a long-term revenue growth target of 20-25%. A key focus is to increase CPVC contribution from the current 15% to over 20% in the next 1-2 years, leveraging a co-marketing agreement with a leading raw material supplier.

Geographical Expansion and Plant Ramp-Up

Apollo Pipes is strengthening its geographical presence with the steady ramp-up of its West India facility, which is playing a key role in catering to demand in the Western region. Additionally, a new plant in Varanasi is on track to commence operations in the coming months, which will significantly bolster the company's presence in the Eastern Indian market, targeting new construction infrastructure spends in that belt. The Kisan acquisition, now 15 months old, has seen supply chain and distribution network issues resolved, with improved realizations targeted from Rs. 4,000 to Rs. 7,000-Rs. 8,000 per ton.

Disciplined Capital Expenditure and Working Capital Management

The company incurred CAPEX of Rs. 70 crores in Q1 FY26, following Rs. 166 crores in FY25. It plans for an additional Rs. 70-80 crores in the next three quarters, with a residual Rs. 30-40 crores for FY26, to expand total installed capacity to 286,000 tons over two years without incurring new debt. The working capital cycle remained disciplined at 38 days, with a target to improve to 30 days by end of FY26 or H1 FY27, and a sustainable 25-30 days.

Outlook on Demand Recovery and Competitive Landscape

Management anticipates a more favorable demand environment from September onwards, post-monsoon, with increased government spending expected to boost liquidity. While competitive intensity remains high due to overcapacity and sluggish demand, leading to aggressive pricing, the company expects a 'cleanup' in the sector in a few quarters as smaller players struggle. This consolidation is projected to lead to a more rational pricing environment and improved margins, with ROCE targeted to exceed 20% in 2-3 years.

Market Share and Long-Term Growth Aspirations

Apollo Pipes currently holds a market share of 2.5%-3% based on its current revenue run rate of Rs. 1,200-Rs. 1,300 crores against an industry size of Rs. 40,000-Rs. 45,000 crores. With its expanded capacity of 286,000 tons, the company aims to generate Rs. 3,000 crores in revenue, targeting a market share of 5% within 3-4 years. This growth will be supported by continuous product innovation and market penetration, aiming for a long-term revenue growth rate of 20-25%.

This is an AI-generated summary of a publicly available earnings call transcript.

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