APL Apollo Tubes Ltd Management Discussions.




2021, was the year in which all nations across the world, small or big, advanced, developing or emerging, in one voice echoed RESURGENCE. A single word that aptly encapsulates the mood and spirit of the world economy. Despite the multiple waves of the pandemic impacting nations, the world refused to relent. It fought back with disciplined determination to eliminate the fear from this invisible enemy and flatten the curve.

Global GDP grew 5.5% in 2021 against a contraction of 3.2% in 2020. Global trade stood at US$28.5 trillion - a growth of 25% over the benchmark of 2020. Trade in services rose by US$50 billion to touch $1.6 trillion, just above the pre-pandemic levels. The only impediments to the worlds economic progress were the lingering global logistics and supply chain issues, a significant shortage of semiconductors and poor growth in the communication equipment sector.

Going forward, global GDP is expected to grow by 4.1% in 2022 owing to the continued supply-chain disruptions and withdrawal of fiscal support the world over. This number could be lower owing to the Russia-Ukraine crisis which has indirectly impacted the progress of several economies - advanced, developing and emerging.

India emerged as the fastest growing major economy as she resurged with poise from the abyss of economic apathy.

Despite the increasingly contagious and virulent second wave that impacted lives and livelihoods across the Indian landmass, a resurgent India and vaccinated Indians successfully flattened the curve with speed. As fear subsided, economic activity resumed with renewed vigor owing to pent- up demand resulting in a significant increase in private consumption. An increase in Government expenditure further fueled economic growth.

As a result, Indias GDP expanded by 8.9% in FY22 against a contraction of 6.6% in FY21. The growth was contributed by all segments of the economy namely agriculture, industry and services - the industrial segment was the star performer registering a growth of more than 11% in FY22 against a contraction in the previous year.

The nation garnered higher tax collections of over Rs.27 trillion in FY22 about 34% more than what the government collected in FY21.

The economic resurgence, so to speak, was cut short towards the end of FY22 owing to the geopolitical crisis which resulted in a spike in commodity prices, fuel prices, supply-chain disruption and logistical costs - which hurt the economic progress in Q4 of FY22 and whose impact will be felt in FY23.

In keeping with this reality, the Reserve Bank of India factored this negative and pared its estimated GDP growth for FY23 from 7.8% to about 7.2%. This number, in reality though, will depend on the duration of the war and the outcome of debilitating sanctions that the western world has imposed on Russia - it will have its set of opportunities and challenges for India Inc. in FY23.



IIT Kanpur defines Structural Steel Tubes as seamless and welded tubes that are in the form of circular, oval, square, rectangular and special shapes.

The primary purpose of these tubes is to be used in welded, riveted, or bolted construction of bridges and buildings.

These days almost all modern structures like airport terminals, modern buildings, warehouses, etc. use structural steel tubes extensively.

Structural steel tubes provide interesting benefits over other products of comparable types. This kind of tube has very high tensile strength and works very well against longitudinal stress, meaning it does not bend easily.

During construction, it provides greater durability than regular pipes and concrete. These tubes are corrosion-resistant. In terms of construction, structural steel tubes are very flexible to work with. As a steel material, it is very recyclable. Using steel pipes can be very cost-effective because of the minimum requirement of the workforce and its cheaper than other materials. Also, it provides excellent protection to the materials running through it. Also, these tubes are light and consistent, so weight is not a concern anymore

The structural steel tubes market in India is still at a nascent stage. Infrastructure players are still waking up to the benefits of using these tubes in big construction projects as a much better alternative to concrete-based structures.

According to sources, 9% of total steel used globally is in the form of structural steel tubes. But in India, that number accounts for only about 4%. In India, housing construction is fueling the demand for structural steel tubes. Also, the Governments push for infrastructure expansion and fast-track construction of large infrastructure projects like airports is driving the demand for these tubes. Warehouse creation is also fueling offtake.

Moreover, the pandemic and the resultant labour shortage, have pushed construction companies to use these tubes - owing to their easily customisable nature. Indias structural Steel Tubes market size is 4 Mn tonne, out of a total ERW market size of 6 mn tonne (balance is water transportation).



Headquartered in the Delhi NCR region, APL Apollo is a pioneer and leading branded steel product manufacturer in India.

The Companys 11 state-of-the- art manufacturing facilities have the capacity to manufacture 2.6 mn tonnes of structural tubes. The product type includes-Pre-galvanised tubes, Galvanised tubes, Structural ERW tubes, MS Black pipes and Hollow sections which allows us to offer the most diversified product portfolio in branded steel products space comprising more than 1,500 SKU. The Companys products are used across India for diverse applications and exported to 20 nations globally.


The Companys operations scaled a few notches higher as production volumes increased from 1.6 mn in FY21 to 1.7 mn in FY22 This was despite the covid-related disruption in the first two months of the fiscal.

This increase happened owing to the operations teams effort on improving its production planning and disciplined execution thereof.

During the financial year, the Company launched three value-added products namely Color Coated Tubes.

Black Annealed Tubes and Galvalume Tubes. Commercial production of Colour Coated Tubes commenced at its Greenfield facility at Raipur - for this the Company invested in novel technology.

At the same unit, trial production for Black Annealed Tubes and Galvalume Tubes is underway - the commercial production of these products is expected to commence in the current financial year.

The other highlights for the financial year under review were: The Company entered the pre-engineered building space with considerable success.

It capitalised on the opportunity to build a medical building and an oxygen plant leveraging this technique - the steel structures of these buildings have been put in place in record time as compared with the conventional method of construction. The successful completion of these projects is expected to open the floodgates of opportunity.

Adding another milestone in its corporate journey, the Company introduced path-breaking initiatives to move closer to the ultimate consumer. It launched an app for the end consumer to connect with the Company and its products; it set up its first 5,500 sq ft retail store for steel tube furniture distributor store in Dehradun.

In addition, the Company onboarded Tiger Shroff as the brand ambassador for its products - TV commercials and social media campaigns pivoted on the new brand ambassador were launched in the second half of the financial year.



APL Apollo continued to better its performance despite the volatility that prevailed through the year under review. This is owing to its robust business model, accurate business strategies and discipline execution.

Revenue from operations scaled to Rs.1,30,633 million in FY22 against Rs.84,998 million in FY21 - a jump of 54%. This growth is volume-led as it is value-driven. Sales volume from 1.64 mn tonnes in FY21 to 1.75 mn tonnes in FY22 while the share of value-added products in its sales mix increased from 57% in FY21 to 63% in FY22.

EBITDA increased from Rs.6,787 million in FY21 to Rs.9,452 million in FY22 (EBITDA is excluding Other Income). While the EBITDA per tonne increased from Rs.4,138 in FY21 to Rs.5,386 in FY22.

Net Profit for the year scaled to a new peak-it stood at Rs.5,573 million in FY22 (Net Profit is after non controling interest) against Rs.3,602 million FY21. Earnings per share increased from Rs.14 in FY21 to Rs.22 in FY22.

Of the Net Profit earned during the year, the Company has set aside Rs.876 million to be distributed as dividend to shareholders, the balance being ploughed into the business for strategic growth initiatives.

In doing so, the Companys Networth grew from Rs.16,947 million as on March 31,2021, to Rs.22,640 million as on March 31,2022. Correspondingly, the Book Value per share increased from Rs.68 to Rs.90 over the same time period. The Return on Networth improved by 398 bps over the previous years benchmark (24.8% in FY21) to 28.8% in FY22.

The Company deployed majority of its business liquidity into capacity augmentation and capability building initiatives.

It invested Rs.586 million in FY22 in capex projects. This has resulted in an increase in the Net Block (from Rs.15,014 million as on March 31,2021, to Rs.16,041 million as on March 31, 2022) and in the Capital Work-inProgress (from Rs.1,077 million as on March 31, 2021, to Rs.5,037 million as on March 31, 2022).

The debt equity ratio from 0.10x in FY21 to 0.09x in FY22. It reduced the interest liability for the Company.

The Company continued to monitor is working capital closely. Hence despite a significant increase in business operations, working capital remained stable. It could sustain its working cycle at less than 10 days. This is a new benchmark in the Indian structural tube space. This is also a reflection of the Companys product quality and brand position.

Significant changes

In accordance with the amendments notified by SEBI in Regulation 17 of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 on 9th May 2018, the details of significant changes i.e. change of 25% or more in the key financial ratios as compared to the immediately previous financial year along with detailed explanations are reported hereunder:




Change (%)

Reasons for change
Current Ratio




Current ratio improved due to better working capital management
Debt-Equity Ratio




Remain unchanged as the Company incurred large capex
Interest Coverage Ratio




Companys EBIT increased 43% while net debt increased by 26%
EBITDA margin (%)




EBITDA/ton increase by 30%, however margins appears low due to high NSR
Net Profit Margin (%)




PAT increased by 55% supported by EBITDA growth of 39% and interest cost declined by 33%
Return on Net Worth (%)




Due to increase in PAT & better working capital management


APL Apollo regards its people as its most valuable assets As such, the Company sustained its investment in its human capital to sharpen their expertise, nurture their leadership qualities and provide them a platform to ideate, innovate, fail and succeed.

The Company, through its peoplecentric policies and initiatives, continues to keep its people engaged, enriched and motivated.

The Company went above and beyond to support its people during the second wave of the pandemic.

In these trying times, the Company continued its capability-building efforts by leveraging the virtual mode.

These practices enable the Company to keep the attrition rate well below the industry average. The APL Apollo team comprised 2,137members as on March 31, 2022.

However, the future of work, talent and employment is changing at an unprecedented pace but in the Company, the management believes in keeping our team happy, competent and inspirational to unleash the intrinsic value within them.

Going forward, the HR team will focus on strengthening its leadership pipeline. Besides, the team will work closely with the IT team to deploy IT-based solutions for improving the working environment.


At APL Apollo, the internal control mechanism is designed to protect its assets as well as authorise, record and correctly report all transactions on time. It conforms to the locals statutory requirements and meets the highest global standards and practices to remain competitive in evolving business dynamics.

The internal control framework monitors and assesses all aspects of risks associated with current activities and corporate profile, including scientific and development risks, partner interest risks, commercial and financial risks.

While ensuring flawless competition of accounting and financial processes, the internal control mechanism reviews both the manual and automated processes for transaction approval.

The Audit Committee carries out periodic reviews of the internal audit plan, verifies the adequacy of the control system, marks its audit observations, and monitors the sustainability of the remedial measures.


Risk management is integral to any business APL Apollo has devised its risk management mechanism to predict, preempt and prevent financial or commercial risks, errors and frauds. It simultaneously strengthens the Companys business model to make profitable growth sustainable.

The framework involves an integrated risk appraisal system and mitigation strategy with all key managers being part of the mechanism. The control measures are placed before the Companys board for periodic review and improvement.