APL Apollo Tubes strong this Friday noon

APL Apollo Tubes is trading up 6.7% at Rs. 375 per share. BSE’s traded quantity of 13,000 shares is way higher than 2 week average quantity of 1,821 shares. Manufacturing steel pipes and tubes, company has launched new steel door and window frames to boost low cost housing in India, as part of PM’s project of housing for all, coupled with supporting the ‘Make in India’ movement.

APL Apollo Tubes, India’s largest ERW steel tubes maker with capacity of 8.4 lakh TPA across 6 manufacturing facilities, believes the cost of these newly launched steel door frame is 40% cheaper than the currently used wooden door frame, as it has almost double life. In addition, steel frames are superior to wood as they are termite and pest-resistant. The steel design has also been patented from the Patent Office of the Indian Government. Moreover, company has also launched welding electrodes and zinc spray under its own brand Apollo Agni and Touch Up, respectively.  

With exports to Europe, US, Australia and Asia, company aims to develop further products to support its existing basket of 400 different pipes and sections. It aims to spend 0.5% of its annual sales of over Rs. 3,000 crore on R&D. For 9MFY15, company reported consolidated revenue of Rs. 2,288 crore and net profit of Rs. 57 crore, resulting in EPS of Rs. 24.32 for the nine months v/s Rs. 25.16 for FY14. Thus, valuation is attractive given the future prospects.