Skip to content

    Apollo Pipes Q1 FY27 earnings call

    APOLLOPIPE
    Capital Goods·31 Jul 2026
    Management Summary

    Apollo Pipes Limited experienced a challenging Q1 FY27 with flat volumes and margin pressure due to PVC price volatility and inventory write-downs. Despite this, the company maintained a normalized EBITDA margin of 7% and expects a strong recovery with double-digit volume growth from Q2 onwards, supported by new plant ramp-ups and strategic product focus. Management is confident in achieving 7-8% EBITDA margins in the near term and a long-term revenue target of ₹5,000 crores with 25% ROC by FY31.

    Highlights

    5

    • Normalized consolidated EBITDA margin stood at 7% despite market volatility.

    • Company anticipates high double-digit volume growth for FY27 and subsequent years, with Q2 FY27 expected to show double-digit YoY growth.

    • CPVC segment demonstrated YoY growth in Q1 FY27.

    • Varanasi plant is targeted to achieve 30% utilization in FY27, contributing approximately ₹90 crores in revenue.

    • Management aims to reduce Net Working Capital days from 45 to 30 and debtor days to 25 by FY27-end or H1 FY28.

    Concerns

    4

    • Q1 FY27 saw a soft start with flat YoY sales volume due to geopolitical disruptions and high PVC resin price volatility.

    • PVC resin prices fell by ₹32/Kg in April and ₹5/Kg in June, impacting profitability.

    • Consolidated EBITDA was negatively impacted by inventory write-downs, aggressive pricing, and fixed expenses for new business verticals.

    • Government infrastructure business (O-PVC or HDPE) contributed almost zero to volume in Q1 FY27.

    Key financials

    Single quarter

    05 metrics
    1. 01Total Sales Volume Growth0%0%YoY
    2. 02Consolidated Normalized EBITDA Margin7%
    3. 03Apollo Standalone Normalized EBITDA Margin8%
    4. 04Kisan Standalone Normalized EBITDA Margin6%
    5. 05Kisan Business EBITDA Margin5%

    Segment breakdown

    CPVC
    YoY growth qualitative Growth
    Window Profile
    Ramping up qualitative Status
    Bath Fittings
    Flattish qualitative Growth
    Water Tank
    Double-digit growth qualitative Growth
    Government Infrastructure (O-PVC/HDPE)
    Almost zero qualitative Contribution
    Fittings
    Single-digit growth qualitative Growth
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹100 crores

    funded from operating cash flow

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Focus on reducing Net Working Capital days from 45 to 30 and debtor days from 30 to 25 by FY27-end or H1 FY28 through working capital efficiencies and cash-and-carry schemes.

    Guidance & targets

    13
    CategoryTargetPriority
    Volume
    Volume Growth
    High double-digit
    		High
    Margin
    EBITDA Margin
    7% to 8%
    		High
    Revenue
    Window Profile Revenue Contribution
    7% to 8%
    		Medium
    Revenue
    Top Line
    ₹5,000 crores
    		High
    ROC
    New Product Additions ROC
    25%
    		High
    ROC
    Return on Capital
    25%
    		High
    Capex
    Annual Capex
    ₹100 crores
    		High
    Working Capital
    Debtor Days
    25 days
    		High
    Working Capital
    Net Working Capital Days
    30 days
    		High
    Capacity Utilization
    Varanasi Plant Utilization
    30%
    		High
    Capacity Utilization
    Varanasi Plant Utilization
    50%, 60%, 70%
    		High
    Capacity Utilization
    Varanasi Plant Utilization
    Balance
    		High
    Synergy
    Kisan Merger Cost Synergies
    1%
    		Medium

    What to watch in Q2 FY27

    5

    Q2 FY27 Volume Growth

    Next quarter (Q2 FY27)
    CurrentFlat YoY in Q1 FY27
    TargetDouble-digit YoY growth

    Why it matters

    Verifying the company's projected recovery and market share gains after a soft Q1.

    It will be double-digit growth on YoY basis in Q2.

    Risks & concerns

    4
    RiskSeverity

    PVC Resin Price Volatility

    High volatility in Q1 FY27 with prices falling by ₹32/Kg in April and ₹5/Kg in June, leading to inventory write-downs and impacting EBITDA. — Management acknowledged

    high

    Soft Demand and Geopolitical Disruptions

    Q1 FY27 saw flat YoY sales volume due to geopolitical situation disrupting global supply chains and extreme price drops affecting primary and secondary demand. — Management acknowledged

    medium

    Impact of New Business Verticals on Short-Term Margins

    Fixed expenses for new business verticals (Varanasi plant ramp-up, Window profile D2C) contributed to EBITDA pressure in Q1 FY27. — Management acknowledged

    medium

    Slow Government CAPEX for Infrastructure

    Government CAPEX funds for programs like Nal Se Jal have not yet translated into significant activity, impacting demand for O-PVC and HDPE products. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “The current MIP was applied around 12-days back and it is $766 per MT, which in Indian terms amounts to Rs.82 approximately per Kg on export basis. So, the current reliance price is slightly above this price and the market is again near to the reliance price or you can say 1% or 2% above this market price. So, the overall premium is there right now because of the MIP and because of some shortage because of the steep falls in the Q1. People are not very keen to keep inventories with them because of that disturbed global scenario. So, the market is there despite that monsoon is there, the premium is there and the demand is also good because of the low inventories with the channel partners. So, put together, you can say the prices are stable to little bit of, you can say downwards in the next few weeks, but not too much scope is there because of the MIP that price will be settled to the level of Rs.82. It cannot go below that as MIP has been fixed by the Indian government. So, we feel that the prices should remain stable in the near future.”

    Clarifies the immediate impact of the Minimum Import Price (MIP) on PVC resin, indicating price stability and good demand despite monsoon, which is crucial for margin outlook.

    asked by Sneha

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance and Market Challenges

    Apollo Pipes Limited experienced a soft start to FY27, with total sales volume remaining flat YoY. This was primarily attributed to geopolitical disruption🌐s affecting global supply chains and extreme volatility in PVC resin prices, which saw drops of ₹32/Kg in April and ₹5/Kg in June. Consolidated EBITDA was negatively impacted by inventory write-downs, aggressive pricing, and fixed expenses associated with new business verticals, though normalized consolidated EBITDA margin stood at 7%.

    02

    PVC Market Dynamics and MIP Impact

    The market saw the application of a Minimum Import Price (MIP) at $766/MT (approximately ₹82/Kg), which has helped stabilize PVC prices. Management noted that current reliance prices are slightly above this MIP, contributing to a stable market despite monsoon season. Demand is good due to low channel inventories, and prices are expected to remain stable in the near future, with no significant supply disruption anticipated.

    03

    Volume and Margin Outlook

    Despite the Q1 softness, the company is confident of achieving high double-digit volume growth for FY27 and subsequent years. Q2 FY27 is projected to show double-digit YoY growth, with the second half of the fiscal year expected to be significantly better than the first. Management targets sustaining EBITDA margins at 7-8% over the next 12-15 months, with potential for further improvement as new plants stabilize.

    04

    Strategic Growth Drivers and Capacity Expansion

    Key growth drivers include the newly commissioned Varanasi plant, which targets 30% utilization in FY27 (generating approximately ₹90 crores in revenue), ramping up to 50-70% in FY28, and full utilization by FY29. The Maharashtra plant is also undergoing continuous ramp-up. New product verticals like Window Profile are expected to contribute 7-8% to revenue in FY27, with a long-term potential of 10% at full capacity. The company's long-term vision by FY31 includes achieving ₹5,000 crores in top line with a 25% Return on Capital (ROC).

    05

    Working Capital Management and Efficiency

    The company's inventory days stood at 80 in Q1 FY27, consistent with FY26-end. Debtor days were stable at 30. Management aims to reduce debtor days to 25 by FY27-end or H1 FY28 and target a net working capital (NWC) of 30 days, down from the current 45 days. These improvements are expected to release funds and enhance cash flow, supported by cash-and-carry schemes and better credit terms with suppliers.

    06

    Capital Expenditure Plans

    Apollo Pipes plans an annual CAPEX of approximately ₹100 crores for both FY27 and FY28, which will be entirely funded through operating cash flows. This capital will be allocated towards completing the Varanasi plant, ongoing brownfield expansions, new product additions, and the development of a new plant in South India. The next leg of CAPEX, estimated at ₹600-700 crores over five years, will also be 70-80% met from internal cash flows.

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