Apar Industries (APR IN) – Q2FY27 Result Update – Strong Q2, Margin resilience amid volume volatility – ACCUMULATE
Published on 30 Oct 2026
APAR Industries (APAR) reported strong revenue growth of ~21.3% YoY with EBITDA margin expanded by 164bps YoY to ~9.8% (adj for net of US tariff returns of INR427.5mn), aided by higher sales realizations and profitability across segments. In Conductors, premiumization and execution of higher-margin orders lifted EBITDA/MT to INR48,241 (vs INR39,363 in Q2FY26) despite a 9.2% decline in volumes, while delayed customer clearances impacted offtake; management expects volumes to recover in H2FY27. The record conductor order book of INR120.3bn, including ~INR30bn of international utility orders, provides strong revenue visibility, with premium HTLS and OPGW products and accelerating reconductoring requirements offering structural growth opportunities. The Oil division delivered robust profitability, with EBITDA/KL rising to INR23,262 (vs INR6,517 in Q2FY26), reflecting improved realizations and a strategic shift towards higher-margin customers amid input-cost volatility; however, management indicated that current elevated margins should not be considered a normalised run rate. The Cables business maintained healthy momentum, with 22.1% YoY revenue growth and margins of 11%; its INR30bn order book is supported by ~INR10bn of data-centre-related orders from Google and Amazon, alongside opportunities in renewables and railways. Capacity expansion and commissioning of new equipment are expected to support larger, higher-specification orders and enhance participation in premium cable applications. The proposed investment of up to US$100mn in wholly owned Singapore subsidiary Petroleum Specialities Pte ltd (PSPL) could support overseas expansion. The stock is currently trading at a PE of 41.1x/35.6x on the earning of FY28/29E. We roll forward to Sep’28E and maintain our ‘Accumulate’ rating while valuing the Conductors/Cables/Specialty Oils segment at a PE of 43x/43x/18x Sep’28E (40x/40x/16x Mar’28E) given ongoing capacity expansion plan, improving product mix and better medium-term growth visibility. This results in a revised SoTP-derived TP of INR16,674 (INR14,720 earlier).
