Motilal Oswal has given a positive recommendation for APL Apollo Tubes, with a buy rating and a target price of Rs 1,750, according to their research report dated October 29, 2024.

The company faced challenges in the second quarter, with a 62% year-on-year decline in EBITDA per metric ton due to an inventory loss of approximately INR 1.5 billion caused by falling steel prices and increased discounting. Despite these setbacks, APL Apollo Tubes saw a modest revenue growth of 3% year-on-year, driven by a 12% increase in volume, although realizations dropped by 8%. Analysts expect margins to recover in the second half of the fiscal year, supported by an improved product mix and favorable operating leverage.

Earnings forecasts for FY25E and FY26E have been adjusted, with reductions of 10% and 6% respectively. The stock is valued at 35 times the estimated earnings per share for September 2026, reinforcing the buy recommendation. The outlook remains positive, with expectations of a compound annual growth rate of 20% in revenue, 22% in EBITDA, and 28% in PAT from FY24 to FY27.