Stock to buy: Apar Industries shares trade at discount to cable peers, offer 20% upside, says Antique

Antique Stock Broking initiated coverage on Apar Industries with a 'Buy' rating, citing sustained growth visibility driven by premiumisation, rising exports and strong positioning in fast-growing power sector segments. The brokerage set a target price of Rs 10,740, valuing the stock at 27 times FY28 estimated earnings, and said the stock traded at a discount to frontline cable peers despite comparable growth prospects.

Antique Stock Broking said Apar Industries is a global leader in aluminium and alloy conductors, India’s largest and the world’s third-largest transformer oil manufacturer, and a key producer of renewable and specialty cables. The company had a diversified product portfolio and strong overseas presence, with exports contributing 30-40 per cent of revenues.

The brokerage said global power sector investments, led by data centres, renewable energy integration and electric mobility, were driving demand for conductors, cables and transformer oils. It expected Apar Industries to deliver a consolidated revenue, Ebitda and profit CAGR of 18 per cent, 21 per cent and 25 per cent, respectively, over FY25-28.

Antique Stock Broking noted that while the stock saw a sharp re-rating during 2022–24, it underperformed over the past year amid investor concerns around tariff-led trade protectionism. Data showed the stock is down 14 per cen year-to-date. Antique's target  price suggests 20 per cent potential upside over the prevailing stock price. The brokerage viewed concerns as temporary and said core growth drivers remained intact.

On the demand outlook, the brokerage said rising electricity consumption globally and in India, supported by grid modernisation, renewable integration, railway electrification, electric vehicle adoption, urbanisation, data centres and metro projects, would require significant investments in power transmission and distribution, benefiting ancillary segments such as conductors, cables and transformer oils.

Antique Stock Broking highlighted premiumisation as a key earnings driver. It said the share of premium products in the conductors segment rose to 45 per cent in FY25 from 1 per cent in FY15, supported by the addition of high-performance conductors, copper conductors for railways, transpose conductors for transformers and optical ground wire products. In specialty oils, the increasing mix of naphthenic and special grades improved margins, while the focus on complex elastomeric cables supported profitability in the cables business. As a result, Ebitda growth strengthened meaningfully over the past decade.

On exports, the brokerage said Apar Industries had built a strong global footprint across Europe, Africa, Asia, North America and South America. Exports accounted for 24 per cent, 31 per cent and 44 per cent of conductors, cables and specialty oil revenues, respectively, in FY25, and grew at a 16 per cent CAGR over FY19–25. It added that the company’s strong certification profile, including the highest number of UL certifications among Indian cable makers, supported its global expansion without diluting profitability.

Antique Stock Broking said Apar Industries remained well positioned to benefit from the global energy transition and infrastructure expansion. It highlighted the company’s net cash position of Rs 380 crore and return on equity and capital employed of 19.6 per cent and 31.1 per cent, respectively, in FY25, supporting its positive stance on the stock.