- Apollo Pipes FY25 Performance and Outlook: Key Updates and Strategy
- Financial Performance and Investments
- Margins and Return Expectations
- What Will Drive Growth in FY26
- Changes in Product Mix and Segment Trends
- Expansion in Distribution and Brand Strategy
- Asset Use and Working Capital
- What Management is Expecting for FY26
- Technology and Product Plans
- Key Risks to Watch
- FAQ on Apollo Pipes FY25 and FY26 Plans
Apollo Pipes FY25 Performance and Outlook: Key Updates and Strategy
Apollo Pipes faced several challenges in FY25, but the company stayed on track with its growth strategy. Despite industry-wide issues, Apollo Pipes showed strong volume growth and improved its product mix. Let’s go through the key updates from the company’s Q4 FY25 earnings and business outlook.
Industry Situation in FY25
FY25 turned out to be a difficult year for the entire PVC pipes industry. Demand was low in key sectors like real estate and infrastructure. Because of this, many dealers and channel partners reduced their stock, especially as PVC prices kept changing. This led to a 5% drop in overall industry volumes.
Even in this tough environment, Apollo Pipes grew its volumes by 23%. This was mainly possible because of its acquisition of Kisan and its expansion into new areas. The company’s growth stood out while others were struggling.
Financial Performance and Investments
Q4 and FY25 Results at a Glance
| Metric | Q4 FY25 |
|---|---|
| Revenue | ₹315 crore (highest-ever quarterly revenue) |
| EBITDA | ₹95 crore (flat YoY) |
| Net Cash | ₹46 crore (consolidated level) |
| FY25 Capex | ₹166 crore |
| Installed Capacity | 2,32,000 tons (to reach 2,60,000 tons in FY26) |
Even with market issues, Apollo Pipes delivered its best-ever quarterly revenue in Q4 FY25. EBITDA stayed the same year-on-year due to pressure on margins. However, the company remained in a strong financial position with ₹46 crore in net cash.
Apollo Pipes spent ₹166 crore in FY25 for capacity building. Its total installed capacity went up to 2,32,000 tons and is expected to reach 2,60,000 tons by FY26.
Support from Investors
Apollo Pipes got ₹110 crore from an Oman-based fund. This money is being used for setting up a new greenfield plant in South India. This shows investor trust and also supports the company’s plans to expand in new markets.
Margins and Return Expectations
Apollo Pipes is currently operating with EBITDA margins of 8–8.5%. Over the next two years, the company aims to improve this to 10–11%. For Kisan, which was earlier loss-making, margins have improved to 3–4%. The goal is to take this up to 6–7% by FY27.
In terms of returns, Apollo Pipes is targeting a Return on Capital Employed (ROCE) of 25% in the next two years. This is based on the assumption that volumes will grow at 25% CAGR and margins will improve steadily.
What Will Drive Growth in FY26
1. oPVC Segment
- oPVC is a high-margin product.
- Total market size is around ₹7,000–8,000 crore.
- Apollo Pipes has three oPVC lines running.
- So far, government adoption has been slow, but a big ramp-up is expected in FY26–27.
- Kisan will also make oPVC using an alternate technology, which costs less.
2. Window Profile Business
- Apollo Pipes is entering the window profile segment with a ₹60 crore investment.
- Commercial launch is planned for June 2025.
- Focus is on both housing and commercial projects.
- Management sees huge long-term demand in this space.
3. Varanasi Plant
- A new plant in Varanasi will start in the second half of FY26.
- This will serve Central and Eastern India.
- It will help with volume growth and reduce logistics costs.
Changes in Product Mix and Segment Trends
| Segment | Performance |
|---|---|
| HDPE / JJM | Demand fell sharply, volumes down by 60–65% |
| Agri Products | Around 45% of total volume, grew in double digits |
| cPVC & Water Tanks | Showed double-digit growth |
| uPVC | Flat volumes due to intense competition and price war |
Apollo Pipes is shifting focus from low-performing areas like HDPE and JJM to higher-growth segments such as agriculture, cPVC, and water storage products. The uPVC segment didn’t grow much because of market saturation and falling prices.
Expansion in Distribution and Brand Strategy
Apollo Pipes has always been strong in North India. But now, it’s expanding to the East, West, and South. This broader reach is expected to support future growth.
Dealer Financing and Promotion
- Around 15% of Apollo dealers use channel financing.
- Kisan is also expected to adopt this system by FY27.
- The company spends about 1% of its revenue on advertising.
- Focus is on plumber engagement and on-ground promotions.
- Kisan is currently focused on operations and product availability; no major brand spending yet.
Asset Use and Working Capital
Apollo Pipes is working towards better asset use and quicker returns.
| Metric | Details |
|---|---|
| Capital Employed (Target) | ₹850 crore |
| FY26 Revenue Target | ₹2,500 crore |
| Asset Turnover | 3.5–4x (gross block) |
| Working Capital Cycle | Apollo: 30–35 days; Kisan to improve over 2–3 years |
The company wants to achieve an asset turnover of 3.5–4 times its gross assets, excluding working capital. Kisan’s working capital management is also expected to improve steadily.
What Management is Expecting for FY26
- Volume growth target: 20–25% overall.
- Apollo: 20%
- Kisan: Higher due to a low base
- Kisan volumes to grow from 20,000 tons to 25,000–30,000 tons in FY26.
- Target of 35,000 tons by FY27 for Kisan.
- Management is confident of meeting these goals.
- Some demand recovery is expected after the monsoon.
Even with industry challenges, Apollo Pipes believes it can continue growing steadily thanks to its new plants, product lines, and expanded reach.
Technology and Product Plans
Apollo Pipes is using Molecor technology for oPVC, which is premium and gives better results. On the other hand, Kisan is using a more cost-effective technology suitable for lower-spec government tenders.
The company sees good future demand in window profiles and is planning to serve both premium and budget housing projects.
Key Risks to Watch
Apollo Pipes is aware of a few risks that could affect its plans:
- Real estate and infrastructure markets are still weak.
- Government approval for oPVC use is taking time.
- Improving Kisan’s margins and working capital will take a few years.
FAQ on Apollo Pipes FY25 and FY26 Plans
Q1: Why did Apollo Pipes perform well when the industry was down?
Apollo Pipes focused on growing its volumes through new markets and by acquiring Kisan. This helped it grow even when the overall market declined.
Q2: What are the major growth areas in FY26?
Key growth areas include oPVC products, window profiles, and geographic expansion like the Varanasi plant and South India projects.
Q3: Is Apollo Pipes in a good financial position?
Yes. The company had a net cash balance of ₹46 crore by end of FY25 and got ₹110 crore from investors to support its growth plans.
Q4: How are margins expected to move?
Apollo Pipes is aiming to grow its margins from 8–8.5% to 10–11% in the next 2 years. Kisan’s margins are also improving steadily.
Q5: What are the risks for the company?
Some key risks include slow demand in infrastructure, delays in government adoption of oPVC, and gradual improvement in Kisan’s business.
Apollo Pipes is dealing with a tough market, but the company is focused and moving in the right direction. The expansion into oPVC, window profiles, and new regions like Varanasi and South India shows clear planning. Kisan’s integration is also going well. If demand picks up post-monsoon, Apollo Pipes could see even better results in FY26.
By focusing on efficiency, smart investments, and new product segments, Apollo Pipes is aiming for strong, stable growth in the next two years.
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I’m Rahul Chaudhary, and I write about everything related to the Share Market. From Stock Trends and Share Prices to the Latest News and IPO Updates, my articles aim to provide you with valuable insights to help you navigate the world of investing. Stay tuned for expert tips and updates to keep you informed!
