APL Apollo Tubes shares: Q1 FY27 volumes hit by slow demand; check brokerages' views, targets

APL Apollo Tubes Ltd reported lower consolidated volumes in Q1 FY27 due to softer demand amid geopolitical uncertainties.

"APL reported Q1 FY27 consolidated volumes of 745kt, down ~6 per cent YoY and 19 per cent QoQ, significantly below management's earlier guidance of 875kt (+10 per cent YoY), which was communicated during the Q4 FY26 earnings call. In our view, the weak performance was driven by softer demand amid geopolitical uncertainties, channel de-stocking following the sharp rise in HRC (Hot Rolled Coil) prices and subdued utilisation at Dubai operations," JM Financial stated.

The domestic brokerage added that while APL Apollo has guided for 15–20 per cent YoY volume growth for FY27E, the weak Q1 FY27 performance increases the likelihood of a downward revision to its full-year volume guidance.

Despite the volume miss, JM Financial maintained its 'Add' rating on the counter with an unchanged 12-month target price of Rs 2,140.

Nuvama Institutional Equities also highlighted the subdued volumes during Q1 FY27.

"Given a volume miss, likely weak Q2 FY27 with falling HRC prices and destocking, we are cutting FY27/28/29E EPS by 3 per cent/6 per cent/6 per cent and target multiple to 33x (from 35x)," it stated.

However, the brokerage expects EBITDA per tonne to remain healthy and above the Q4 FY26 level of Rs 5,525. Nuvama retained its 'Buy' call on the stock but trimmed the target price.

"Retain 'BUY' with a TP of Rs 2,067 (from Rs 2,231) as we rollover to Q1 FY29E EPS. It trades at 34x FY27E EPS," it said.

Nuvama further noted that the Dubai facility is currently operating at below 50 per cent capacity utilisation due to supply disruptions in West Asia, affecting imports of raw materials as well as exports of pipes and tubes.

The brokerage said the recovery at the plant has been slow and is likely to be gradual throughout FY27.

"Q2 is typically seasonally weak due to the onset of monsoons and a slowdown in construction activity, which shall put further pressure on volumes for Q2 FY27," Nuvama added.

Meanwhile, APL Apollo Tubes shares were trading 0.64 per cent higher at Rs 1,796.20 on Thursday. The stock has climbed 8.81 per cent on a year-to-date (YTD) basis.