Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Stock Report

| More

APL Apollo to acquire Shankara's 200,000 MTPA tube manufacturing unit in South India for Rs. 70 crore

Posted On: 2019-04-15 13:22:14


APL Apollo Tubes Limited (APL Apollo), India's leading branded steel tubes manufacturer, today announced that it has entered into an agreement with Shankara Building Products Limited (Shankara) to acquire its 200,000 MTPA tube manufacturing unit based in South India for a total consideration of Rs. 70 crore. The Company proposes to fund this acquisition through internal accruals.

The acquired facility has established manufacturing lines for GI pipes and GP pipes, which are APL Apollo's high margin and value-added product segments, improving portfolio of these products will enable increased revenue and volume contribution of value-added segments while also leading to steady improvement in operating margins.

APL Apollo's existing manufacturing units catering to the southern markets are operating at over 80% utilization levels. In addition, Shankara being the second largest player in the South India market, the Company believes that this acquisition was an excellent opportunity to build and consolidate market share of APL Apollo in South India markets. Further, it will also enable APL Apollo to add further capacities at attractive valuations, given the strong demand outlook over the next few years. The Company anticipates to ramp up volumes at a healthy pace in the acquired unit, which is currently operating at ~40% utilization. The target is to improve the operating efficiency and the utilization levels of the acquired unit to APL Apollo's standard of 80-85%. Furthermore, Shankara has agreed to purchase 2.5 lakh tonne pipe from the Company in FY2020, which will assist volumes, as well as entered into an arrangement to buy exclusively from APL Apollo going forward. APL Apollo will be able to bring down costs related to raw materials, operating costs, and transportation costs owing to economics of scale in the region. This should further lead to a quick turnaround of the facility and will enable APL Apollo to achieve a payback period of less than 3 years.

Commenting on the operational developments, Mr. Sanjay Gupta, Chairman of the Company said, "I am pleased to announce that we have entered into an agreement with Shankara to acquire its 200,000 MTPA tube manufacturing unit based in South. The plant complements our existing operations in Bengaluru and Hosur and will further bolster our manufacturing capacity to meet the growing demand for steel tubes and pipes in South, East and South-Western markets. With improved production of our high-margin products of GI and GP pipes, we expect to further enhance our profitability going forward."

Across all its established lines, the Company operated at close to 85% utilization in Q4 FY19. To further enhance capacity, the Company undertook certain de-bottlenecking initiatives at the latest Direct Forming Technology (DFT) lines. This led to capacity enhancement of 1 lakh MTPA, taking the DFT capacity to 6 lakh MTPA and the total capacity to 2.1 million MTPA.

In Q4 FY19, APL Apollo registered its highest-ever sales volume of 418,355 MT, higher by 39% YoY from 300,830 MT in Q4 FY18. This, translated to a 19% volume growth of 1,339,174 MT in FY19 as compared to 1,130,305 MT in FY18. The growth in Q4 FY19 was primarily driven by strong demand recovery in the value-added product segments of hollow section pipes particularly Direct Forming Technology (DFT) pipes, Pre-galvanized pipes (GP) and Galvanized Tubes (GI) pipes. The Company continues to witness a healthy volume performance across product categories and remains confident of registering strong sales momentum of over 20% in FY20 as well. Further, addition of increased production of GI and GP tubes through the acquisition, will further enhance volumes for APL Apollo, going forward.

Shares of Shankara Building Products Ltd was last trading in BSE at Rs.538.7 as compared to the previous close of Rs. 527.1. The total number of shares traded during the day was 99108 in over 4209 trades.

The stock hit an intraday high of Rs. 558.3 and intraday low of 520.5. The net turnover during the day was Rs. 53776132.

Shares of APL APOLLO TUBES LTD. was last trading in BSE at Rs.1451 as compared to the previous close of Rs. 1469.05. The total number of shares traded during the day was 548 in over 95 trades.

The stock hit an intraday high of Rs. 1464.9 and intraday low of 1441.85. The net turnover during the day was Rs. 796423.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Blue Dart Express Sales at Rs. 31,664 million

Sun Pharma Advanced Research Company Ltd board to announce 4th quarter results on June 2, 2020

Stovec Industries Ltd board to consider Q4, FY20 results on June 4, 2020

Greaves Cotton Limited board to approve Q4, FY20 results on June 5, 2020

CRISIL reaffirms commercial papers rating of Edelweiss Financial Services Limited

Gulshan Polyols Ltd Q4 PAT at Rs. 2.78 crore

Alkem Laboratories Ltd Board to consider FY20 results & Final Dividend on June 05, 2020

Wonderla Holidays Ltd Q4 FY20 PAT slides to Rs. 1.56 crore

S H Kelkar and Company Ltd consolidated Q4 FY2020 PAT at Rs. 12.02 crore

Kewal Kiran Clothing Ltd posts Rs. 15.76 crore consolidated PAT in Q4 FY2020

Gujarat Gas Ltd board to consider FY20 results, dividend on June 5, 2020

Kewal Kiran Clothing Ltd Board approves Dividend of Rs. 6

Deepak Nitrite Ltd reports consolidated PAT of Rs. 172.30 crore in Q4 FY2020

Coromandel International Ltd board recommends dividend of Rs. 12 for FY2020

Fiinovation Partners with Dhampur Sugar to help Delhi Slums Fight COVID-19 Pandemic

LTI Wins 2020 SAP® Pinnacle Award as the Industry Innovation Partner of the Year

Kotak Mahindra Bank fixes floor price for QIP as Rs. 1147.75

Wipro launches Global Channel Partner Program for innovative products and platforms

Shanthi Gears Limited announces financial results for period ended March 31, 2020

V I P Industries Ltd reports consolidated Q4 FY20 PAT at Rs. 9.52 crore

Coromandel International Ltd Q4 FY20 consolidated net profit at Rs. 234.20 crore

PRAJ Industries Ltd posts Rs. 24.86 crore PAT in Q4 FY20

Visaka Industries Ltd reports Q4 PAT of Rs. 6.85 crore

Maruti Suzuki partners with ICICI bank to offer customers specially curated, flexible EMI financing schemes

ITI Limited manufactures face shields -Joins fight against COVID19

Sundaram Finance Ltd board to consider final dividend for FY20

Add-Shop Promotions Ltd Board approves 3:4 Bonus Issue

Satia Industries Limited Signs Agreement with Minerals Technologies to Construct a 42,000 Metric Ton Per Year Satellite PCC Plant in India

Vakrangee announces corporate agency tie up with LIC

Symphony Limited board to announce 4th quarter results on May 29, 2020

Firstsource Solutions Ltd Q4 FY20 consolidated PAT climbs QoQ to Rs. 91.57 crore

Automotive Axles Ltd posts PAT of Rs. 5.75 crore in Q4

Daawat Basmati Rice celebrates relationships with # PehliDaawat Campaign

Newgen Software Technologies Ltd Board approves dividend of Rs. 2 for FY20

Automotive Axles Ltd board recommends dividend of Rs. 0.80

Newgen Software Technologies Ltd Q4 FY20 consolidated PAT up QoQ at Rs. 41.46 crore

McDonald's India Introduces Contactless Take-Out Service For Customers

Infosys and Avaloq Partner to Strengthen Wealth Management Capabilities through Digital Platforms

Reliance Power wins lawsuit in Indonesian Court, to get arbitration award of $68 million

Menon Bearings Ltd Q4 PAT at Rs. 3.30 crore

Indoco receives USFDA approval for Succinylcholine Chloride Injection USP

Steel Strips Wheels Ltd's tractor segment production running at 90% capacity

Orient Electric Ltd board to announce Q4, FY20 results, final dividend on June 1, 2020

Customer Safety in focus: Maruti Suzuki issues safety norms for True Value

Glenmark to commence another new Phase 3 clinical trial on a combination of two anti-viral drugs Favipiravir and Umifenovir in hospitalized patients of moderate COVID-19 in India

Zuari Agro Chemicals Ltd's NPK-A plant resumes operation from May 25, 2020

Polyplex Corporation Ltd Q4 FY2020 consolidated PAT falls to Rs. 22.97 crore

InterGlobe Aviation Ltd board to consider Q4, FY20 results on June 2, 2020

Jubilant Life Sciences Ltd board to approve FY20 results, NCD issue on May 29, 2020

Polyplex Corporation Ltd Board approves final dividend of Rs. 6







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019