APL Apollo Tubes: Motilal Oswal Reiterates Buy, Sets ₹2260 Target
Overview
Motilal Oswal is bullish on APL Apollo Tubes, recommending a 'Buy' with a price target of ₹2260. The report cites the company's 55% market share in structural steel tubes and consistent volume growth, projecting strong revenue, EBITDA, and PAT CAGRs through FY28, supported by capacity expansion and new brand launches.
Market Dominance and Growth Trajectory
Motilal Oswal has reiterated its 'Buy' rating on APL Apollo Tubes (APAT), setting an ambitious price target of ₹2260. The brokerage firm's latest research report, released on January 8, 2026, underscores the company's entrenched leadership and consistent operational performance.
APL Apollo Tubes stands as India's undisputed market leader in structural steel tubes, commanding a significant 55% market share with a robust capacity of 4.5 million tonnes per annum spread across 11 manufacturing facilities. The company has consistently delivered volume growth, reporting record sales of approximately 917 kilotonnes in the third quarter of FY26, marking an 11% year-on-year increase.
Navigating Price Volatility
While hot-rolled coil (HRC) prices experienced a sequential decline in 3QFY26, followed by an uptick due to safeguard duties on steel imports, potential inventory losses were considered. Motilal Oswal has projected EBITDA per metric tonne of ₹5,000 for 3Q, slightly down from ₹5,228 in 2Q. Despite broader industry softness, APAT's commitment to its FY26 volume growth guidance of 10-15% remains steadfast.
Future Earnings Outlook
Looking ahead, Motilal Oswal anticipates APL Apollo Tubes to achieve a compound annual growth rate (CAGR) of 14% in revenue, 29% in EBITDA, and 33% in profit after tax (PAT) over the FY25-FY28 period. The target price of ₹2260 is based on a valuation of 35 times the projected FY27 earnings per share.
Strategic Expansion Fuels Growth
The brokerage's optimism is further bolstered by strategic initiatives including capacity expansion in high-growth regions like Dubai, the introduction of a sub-premium brand 'SG Premium', and sustained healthy demand from the private sector across key segments such as infrastructure, solar energy, and manufacturing.
