2 APLAPOLLO share price target reports by brokerages below. See what is analyst's view on APLAPOLLO share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We expect revenue/EBITDA/PAT to grow at 2-year CAGR of 16.6%/23.5%/32.3% to Rs 109.8bn/ Rs 8.1bn/ Rs 4.5bnover FY20E-22E respectively. We expect EBITDA/ton to improve from Rs 3,092 in FY20E to Rs 3,572 in FY22E on back of better realizations as demand environment improves, higher contribution of large diameter products and other value added products, increase in volumes of Apollo Tricoat and operating leverage. With no major capex now, APAT is expected to generate free cash of Rs 8.1bn over FY21E-22E which will be utilized towards debt repayment. However interest cost is likely to stay flat as repayment of long term debt will be off-set by increase in borrowings for working capital. At CMP, the stock is trading at EV/EBITDA of 8.0x FY21E and 6.4x FY22E. We maintain our BUY rating with a TP of Rs 2,605. (8.0x FY22E EBITDA).
Post results we maintain our revenue estimates for FY20E at Rs 83,574m but PAT estimates stand lowered by 2% to Rs 2,536m only due to higher than expected depreciation (from consolidation of Apollo Tricoat). We expect Revenue/EBITDA/ PAT CAGR of 18.3%/30.1%/54.8% (FY19-21). At CMP, the stock is trading at PER of 13.6x FY20E and 9.7x FY21E revised EPS estimates of Rs 104.6 and Rs 146.5 respectively.Maintain BUY with a TP of Rs 1,792
Over the next 2 years, 1) we expect earnings CAGR of 56.3%, 2) comfortable debt-equity ratio of 0.3x, 3) robust RoE/RoCE of 26.9%/32.7% and 4) high free cash generation of Rs2,638m which not only makes it attractively valued at PER of 12.9x FY20E and 9.2x FY21E earnings but also justifies a premium valuation. We initiate coverage with a BUY and TP of Rs 1792 (12x FY21E EPS).
The ERW industry is expected to continue to report 10-12% CAGR with domestic demand being ~8MTPA with a market size of Rs. 40,000cr. With APAT being the leading player in the domestic ERW industry, we expect it to continue to report healthy market share gains and improved business profits over FY20/FY21 as against FY19 performance. However, given the near term demand challenges owing to macroeconomic slowdown we revise our earnings estimates and now expect APAT to report Volume/Revenue/EBITDA/PAT CAGR over FY19-21E to be 20%/18%/23%/36% respectively over FY19-21E. The growth is largely volume led driven by consolidation of recent acquisitions, organic growth, capacity utilization improvement and improving contribution from value added products like DFT, GI/GP pipes and distribution expansion. In line with estimate revision we also lower our TP to Rs. 1,597 (earlier Rs. 1,897) valuing it at 14x FY21 Sept 19 EPS retain ‘BUY’ rating.
We believe, while FY19 was a year of consolidation, FY20 could be the year of healthy volume growth with momentum to continue even in FY21 driven by consolidation of 2 acquisitions Taurus & Apollo Tricoat, distribution expansion and higher value add product focus which are key long term positives. Besides, it will also allow APAT to maintain technological edge versus competition. We introduce FY21 earnings and revise our TP to Rs. 1,897 valuing it at 13.5x FY21EEPS. Retain “BUY”
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
DISCLAIMER: Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and FrontPage will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein.