Apar Industries (Apar) reported 13% YoY decline in consolidated revenue to Rs18.4bn on a high base (3QFY19 sales grew by 41% YoY), 10% below our estimate. Domestic market slowdown, credit tightness at utilities/EPCs and payment delays led to decline in sales of Conductors (23% volume & 18% value), Oil (12% volume & 19% value) and Cables (7% value). However, favourable revenue mix, led by increased share of high margin products, led to better profitability. EBITDA/MT of Conductors jumped 50% YoY to Rs12,409 (HEC conductor at 22% of sales), EBITDA/KL of Oil rose 8% QoQ to Rs3,082 (auto lube & industrial oil at 24% of sales) while EBITDA margin of Cables rose 80bps YoY to 10.6%. Gross margin was up 420bps YoY and 190bps QoQ to 24.1%. Consolidated EBITDA grew by 8% YoY to Rs1.2bn while EBITDA margin was up 130bps YoY at 6.7%, above our estimate of 5.6%. Aided by lower tax rate at 27% (versus 41% YoY), PAT rose 6% YoY to Rs367mn, 7% above our estimate of Rs344mn. Capex outlay planned for FY20 is Rs1.7bn (Rs1.1bn incurred in 9MFY20) and will materially reduce to Rs650mn from FY21 onwards. The company believes that domestic demand will get a fillip with incremental TBCB orders (10 LoIs already issued) and revival in credit situation once payment arrears are cleared. We cut our earnings estimates and retain Buy rating on the stock with a revised target price of Rs630 (Rs705 earlier) based on 11x September 2021E EPS.