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Apollo Pipes Limited — Q4 FY25 earnings call

Call held 12 May 2025

Management summary

Apollo Pipes navigated a challenging FY25 for the PVC pipe industry, achieving 23% volume growth and a record Q4 revenue of INR315 crores. Despite flat EBITDA and depressed return metrics due to macro headwinds and capex, the company maintained a net cash position and prudent working capital. Strategic investments in new product segments (oPVC, Window Profile) and capacity expansion, alongside an equity infusion, position the company for targeted 20-25% volume growth and improved profitability in FY26 and beyond.

Highlights

Managed 23% volume growth in FY25, driven by inorganic and geographical expansions, against an industry decline of 5%.
Recorded its best-ever quarterly revenue of INR315 crores in Q4 FY25.
Maintained a net cash position of INR46 crores at a consolidated level, even after significant capex spends.
Demonstrated prudent working capital management with a 36-day cycle and 65% operating cash flow to EBITDA.
Increased capacity to 232,000 tons, with plans to reach 260,000 tons by FY26, supported by a secured equity infusion of INR110 crores.

Concerns

FY25 was a challenging year for the PVC pipe industry, which saw an overall decline of about 5%.
EBITDA remained flat at INR95 crores in FY25, with margins impacted by aggressive sales and slow ramp-up at the Western plant.
Return on Equity (ROE) and Return on Capital Employed (ROCE) were depressed due to low capacity utilization, ongoing capex, margin pressure, and a weak macro environment.
Kisan's EBITDA margin was low at 3-4% in FY25, though targeted to improve to 5% in FY26 and 6-7% in the next two years.

Key financials

01 Revenue ₹315 Cr
02 Volume Growth 23%
03 EBITDA ₹95 Cr 0%YoY
04 Working Capital Cycle 36 days
05 Operating Cash Flow to EBITDA 65%
06 Capex ₹166 Cr
07 Capacity 2,32,000 tons
08 Net Cash ₹46 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 ₹100 Cr funded from internal cash flows
- Capacity increase to 260,000 tons by FY26 ₹100 Cr
- Window Profile product segment ₹60 Cr
Our capacity has increased to 2,32,000 tons, which shall further increase to 2,60,000 tons by the year-end FY '26. The residual capex would be INR100 crores to achieve this capacity. It will be funded from internal cash flows. ... So, window project, the capex is expected to be somewhere between around INR60 crores. And we have already done almost 80%, 85% of the expenditure.
Debt Net ₹0 Cr

At a consolidated level, we have net cash of INR46 crores despite heavy capex spends.
Liquidity Cash ₹46 Cr Equity infusion of INR110 crores from an Omani fund, with INR28 crores already credited in April and the balance expected in the next 17 months.

At a consolidated level, we have net cash of INR46 crores despite heavy capex spends. ... On top of it, we will have equity infusion of INR110 crores from an Omani's fund against which INR28 crores already credited in April with balance coming in the next 17 months.

Guidance & targets

Volume

Overall Volume Growth Volume · FY26 · High confidence 20-25%

Apollo Pipes has laid down solid foundation for 20% to 25% volume growth for FY '26.

— Sameer Gupta
Apollo Pipes Standalone Volume Growth Volume · FY26 · High confidence 20%

So if you look at Apollo Pipes standalone, we expect volume growth of 20%

— Anubhav Gupta
Kisan Volume Growth Volume · FY26 · High confidence 25%

Now we are guiding for 25% volume growth, right?

— Anubhav Gupta
Kisan Annual Production Volume Volume · Medium confidence 30,000-40,000 tons

Idea is to take Kisan to like 30,000, 40,000 tons of annual production.

— Anubhav Gupta
Kisan Volume Volume · FY27 · High confidence 35,000 tons

From 20,000 tons today

So by FY '27, Kisan should be near about 35,000 tons as per our business plan.

— Anubhav Gupta

ROCE

Return on Capital Employed ROCE · next 2 years · High confidence 25%

However, we are confident of achieving 25% ROCE in next 2 years as we increase our sales volume at 25% CAGR with margin improvement.

— Sameer Gupta

EBITDA Margin

Apollo Pipes EBITDA Margin EBITDA Margin · next 2 years · High confidence 10-11%

From 8% today

Apollo Pipes, like I said, is at around as you can see, it's around 8% EBITDA margin, right? Definitely, we will want to take it up to 10% to 11% in next 2 years.

— Anubhav Gupta
Kisan EBITDA Margin EBITDA Margin · FY26 · High confidence 5%

From 3-4% today

We believe that in FY '26, these margins could inch up to around 5%.

— Anubhav Gupta
Kisan EBITDA Margin EBITDA Margin · next 2 years · High confidence 6-7%

From 3-4% today

And in FY '27, there will be further improvement of 200, 250 bps. So as we see that in next 2, 3 years, the company has a capability to generate 8% to 9% EBITDA margins easily. ... And Kisan, like I said, will be around 6% to 7% in 2 years.

— Anubhav Gupta

Capacity

Total Capacity Capacity · FY26 year-end · High confidence 260,000 tons

From 232,000 tons today

Our capacity has increased to 2,32,000 tons, which shall further increase to 2,60,000 tons by the year-end FY '26.

— Sameer Gupta

Revenue

Revenue from INR850cr Capital Employment Revenue · High confidence INR2,500 crores

And this capital employment of INR850 crores will give us revenue of around INR2,500 crores, okay?

— Anubhav Gupta

EBITDA

EBITDA from INR2,500cr Revenue EBITDA · High confidence INR250-300 crores

So that means on INR2,500 crores, my company can generate EBITDA of INR250 crores to INR300 crores

— Anubhav Gupta

EBIT

EBIT from INR2,500cr Revenue EBIT · High confidence INR225 crores

and EBIT of around INR225 crores, right, on a capital employment of INR800 crores.

— Anubhav Gupta

Ad Spends

Ad Spends as % of Revenue Ad Spends · Medium confidence 1-1.25%

From 1% today

So ad spends remain at around 1% of the revenue, right? And given that we are able to increase our revenue by 20%, 25%, right? So that much increase you will see in the ad spend also. I don't think we're going to go beyond 1%, 1.25%

— Anubhav Gupta

Channel Financing

Dealers using Channel Financing Channel Financing · current · High confidence 15%

15% as on date.

— Anubhav Gupta

Revenue Contribution

oPVC Revenue Contribution Revenue Contribution · next 2-3 years · Medium confidence 5%

So I guess, see, in terms of revenue, when I say value-wise, right, it would be around 5% in next 2 to 3 years.

— Anubhav Gupta

Market Size

oPVC Total Addressable Market (TAM) Market Size · annual · High confidence INR7,000-8,000 crores

we believe that INR7,000 crores, INR8,000 crores worth of annual sales can be generated through replacement of ductile iron pipes with oPVC, right? So that's the TAM on an annual basis as per our analysis. ... So yes, the TAM is around INR7,000 crores, INR8,000 crores a year.

— Anubhav Gupta

Product Launch

Window Profile Product Launch Product Launch · June 2025 · High confidence June 2025

So Udit, the product launch is lined up for June of 2025, right, which is next month.

— Anubhav Gupta

Plant Commissioning

Varanasi Plant Start Plant Commissioning · H2 FY26 · High confidence H2 FY26

Second is our Varanasi plant, which shall be starting in the second half of FY '26.

— Anubhav Gupta

Volume Split

H1 vs H2 Volume Split Volume Split · FY26 · High confidence 40-45% H1, 55-60% H2

Our trajectory, like how it has been in earlier years, it should be like 40%, 45% in H1 and 55% to 60% in H2, right?

— Anubhav Gupta

EBITDA per ton

Apollo Pipes EBITDA per ton EBITDA per ton · Medium confidence INR1,000 higher than FY25

EBITDA spreads like for Apollo Pipes should be INR1,000 per ton at least higher than what it was in FY '25.

— Anubhav Gupta
Kisan EBITDA per ton EBITDA per ton · Low confidence Slightly higher than FY25

And Kisan, of course, because of low base, will be slightly higher than that.

— Anubhav Gupta

What to watch in Q1 FY26

Window Profile Product Segment Launch

June 2025

Current Capex 80-85% complete

Target Commercial launch and initial sales

Why it matters

This is a new revenue driver expected to contribute significantly to FY26 volume growth.

I'm pleased to tell you, that we have 3 additional revenue drivers, which are oPVC product segment, Window Profile product segment and Varanasi plant. ... So Udit, the product launch is lined up for June of 2025, right, which is next month.

Risks & concerns

Weak macro environment and industry decline
high

FY25 was a tough year for the PVC pipe industry, which declined by ~5%, impacted by slowdown in private real estate and government infrastructure spends.

Management acknowledged
Depressed return profile and margin pressure
high

ROE and ROCE are currently depressed due to low capacity utilization, ongoing capex spends, margin pressure from aggressive sales, and a weak macro environment.

Management acknowledged
JJM segment slowdown
high

JJM-related HDPE pipe volumes declined by 60-65% in FY25 due to government fund release challenges, with no substantial recovery factored into FY26 plans.

Management acknowledged
PVC resin price fluctuation and destocking
medium

Frequent fluctuations in PVC resin prices led to continuous destocking by channel partners, impacting demand.

Management acknowledged
oPVC adoption and equipment procurement challenges
medium

oPVC adoption requires government approvals and conviction, and equipment procurement faces constraints from the sole technology provider (Molecor).

Management acknowledged
Competition and price wars in uPVC segment
medium

The commoditized uPVC product segment experienced massive price wars, leading to losses for many smaller players.

Management acknowledged

Q&A highlights

7 direct

Inventory loss in Q4 FY25 Direct

PVC prices did decline this quarter. But as we carry very little inventory, so inventory losses are very, very miniscule.

Clarified that despite declining PVC prices, inventory losses were minimal due to low inventory levels.

Asked by Keshav Lahoti

Kisan's margin improvement and working capital reduction Direct

So as the capacity ramps up, we will get operating leverage benefits. And of course, as the product availability improves, the pricing premium will also come into play. ... Kisan also as we have more data about their distributors, etcetera. so we are talking to national banks to initiate channel financing at some point.

Management outlined levers for Kisan's margin improvement (operating leverage, product mix) and strategies for working capital reduction (channel financing, better payment terms).

Asked by Keshav Lahoti

JJM (Jal Jeevan Mission) slowdown and recovery prospects Partial

JJM has been weak for the last 13, 14 months now consistently... our volume kind of declined by almost 60%, 65%, right? And for FY '26, we have not factored in any substantial volume recovery in HDPE pipes for JJM.

Management confirmed significant decline in JJM-related HDPE pipe volumes in FY25 and expressed caution, not factoring substantial recovery into FY26 guidance, indicating continued headwinds in this government segment.

Asked by Pujan Shah

oPVC product segment strategy and capex plans Direct

We have made substantial investments in last 12 to 15 months to make a mark in this segment. ... Right now, there are 4, 5 states where this product has been approved and sales have started. ... for further investments, we will want at least 2, 3 quarters of good order book visibility, right? Nothing stops us from putting up more capacity.

Detailed the progress and potential of oPVC, highlighting current state approvals and sales, while linking future capex to sustained order book visibility, indicating a cautious but strategic approach to expansion.

Asked by Pujan Shah

Standalone volume performance in Q4 FY25 and confidence in FY26 growth Direct

Volume is flat. Volume is not minus 5%. Volume is flat. 21,270 was in Q3 and 21,122 is in quarter 4. So it is flat. It is not down 5%. ... So there are 3 drivers, okay, what we believe will drive this 20%, 25% growth in terms of volume. Number one is our window profile products segment... Second is our Varanasi plant... Third is oPVC.

Management clarified that standalone volumes were flat, not down, and articulated three key drivers (Window Profile, Varanasi plant, oPVC) that underpin their confidence in achieving 20-25% volume growth in FY26 despite current weak demand.

Asked by Utkarsh Nopany

Distribution network expansion strategy Direct

Right now, focus is to build network and strengthen network in East India, Central India, which will be fed from our upcoming Varanasi plant. Then along with Kisan, we are working to strengthen their markets in West India... And the third focus is on South India.

Outlined a clear three-pronged strategy for geographical expansion, leveraging the upcoming Varanasi plant for East/Central India, strengthening Kisan's presence in West India, and building market in South India.

Asked by Umakant Sharma

Kisan branding and advertising strategy post-acquisition Direct

So we are working on the basics, right? Kisan brand anyways is very, very strong. So we don't believe that we need to make investments into brand as of now. The first idea is to ramp it up to around like 30,000, 40,000 tons a year in terms of volume. And then we will invest into branding, if at all...

Management prioritized operational basics and volume ramp-up for Kisan before investing heavily in branding, indicating a focus on fundamental business improvement and capacity utilization first.

Asked by Nabanu Mondal

EBITDA per ton for Apollo Pipes and Kisan for FY25 and FY26 guidance Direct

EBITDA spreads like for Apollo Pipes should be INR1,000 per ton at least higher than what it was in FY '25. And Kisan, of course, because of low base, will be slightly higher than that.

Provided specific directional guidance on EBITDA per ton for both Apollo Pipes and Kisan, indicating expected margin improvement in FY26.

Asked by Deepak Pandey

2 min read 5 chapters

Detailed narrative

FY25 Performance Overview and Industry Headwinds

FY25 proved to be a challenging year for the PVC pipe industry, which experienced an overall decline of approximately 5%. This downturn was primarily driven by a slowdown in private real estate and government infrastructure spending, compounded by frequent fluctuations in PVC resin prices that led to continuous destocking by channel partners. Despite these headwinds, Apollo Pipes managed to achieve a 23% volume growth in FY25, though its EBITDA remained flat at INR95 crores, with margins impacted by aggressive sales strategies and a slow ramp-up at its Western plant.

Q4 FY25 Highlights and Financial Position

Apollo Pipes reported its best-ever quarterly revenue in Q4 FY25, reaching INR315 crores. The company maintained a strong financial position, ending the year with a net cash balance of INR46 crores, despite incurring INR166 crores in capex during FY25 (down from INR250 crores in the previous year). Working capital management remained prudent, with a cycle of 36 days, contributing to an operating cash flow to EBITDA ratio of 65%. Additionally, the company secured an equity infusion of INR110 crores from an Omani fund, with INR28 crores already received in April, earmarked for a greenfield plant in South India and other corporate needs.

Strategic Growth Drivers for FY26

The company has laid a solid foundation for 20-25% volume growth in FY26, underpinned by three key revenue drivers. These include the new oPVC product segment, the Window Profile product segment (launching June 2025), and the upcoming Varanasi plant (starting H2 FY26). The Varanasi plant is expected to significantly boost market share in Central and East India, while oPVC, with an estimated annual Total Addressable Market (TAM) of INR7,000-8,000 crores, is projected to contribute 5% to revenue in the next 2-3 years and offer superior margins.

Capacity Expansion and Margin Outlook

Apollo Pipes' total capacity has increased to 232,000 tons and is targeted to reach 260,000 tons by the end of FY26, with a residual capex of INR100 crores funded through internal cash flows. The company aims to improve its EBITDA margin from the current 8% to 10-11% in the next two years. For Kisan, acquired in the past, margins are expected to improve from 3-4% in FY25 to 5% in FY26 and 6-7% in the subsequent two years, driven by operating leverage and product mix improvements as volumes ramp up from 20,000 tons in FY25 towards 35,000-40,000 tons by FY27.

Return Profile and Market Recovery Expectations

Despite a currently depressed return profile (ROE, ROCE) due to low capacity utilization and ongoing capex, management expressed confidence in achieving a 25% ROCE within the next two years, supported by increased sales volumes and margin improvements. The company anticipates a recovery in the macro environment, particularly in real estate and construction activity, post-monsoons in H2 FY26, which is expected to further support its growth trajectory and enable it to surpass its 20-25% volume growth guidance.

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