APL Apollo Tubes Action price increased by more than 3 percent in the afternoon commerce on September 7th The stock, which jumped more than 250 percent last year, was negotiating at RS 1,755.25, Until RS 52.85, or 3.10 percent. He touched a high Intraday of 1,774.95 rupees and a low intraday of 1,720.65 RS.

The search on domestic search and brokerage Mottilal Oswal has launched a blanket on the stock, with a recommendation “Buy” and has a price target of 2,065 rupees per share.

APL Apollo Tubes is the largest manufacturer of construction steel tubes in India that are used in residential and commercial buildings, warehouses, factories and other infrastructure work.

It enjoys a market share of about 50 percent in India and operates through a network of 10 factories, more than 800 distributors, more than 1,500 UGS, and 200,000 fabricators serving more than 50,000 retailers.

The brokerage firm estimates that 20% / 35% revenue / PAT CAG on the A21-24E led by increasing EBITDA / MT and the higher perspiration of assets.

“We appreciate the stock at 35X SEP’23E EPS to arrive at a target of RS 2065 and initiations coverage with a purchase recommendation,” he said.

Motilal Oswal expects strong growth in improved volume and profitability due to higher demand between product segments, launching new products in the parent company. The new fused entity Tricoat, with the solid distribution network, will result in an increase in the market share with a greater cross-selling opportunity for the merger, and the increase on the share of VAP leads the margin and profitability .

“We are expecting APAT to deliver 20% / 26% / 35% consolidated turnover / EBITDA / PAT CAGR to ~ RS 14800 CRore / RS 1360 CRore / RS 900 CRore and generate RS 3130 cumulative / FCF solids CRORES / RS 2080 CRORES on FY21-24E. It is supposed to turn positive net liquid from 20023e. APAT peers (in the space of building material) at an average FY23e forward P / E of 36x, “he said.

“The stock should go for a similar valuation as its peers in the building material space because of its low-cost leadership and position in structural tubes, the return ratio profile and the decline in days of WORKING FUND, “he added.