Apar Industries Ltd Powering Ahead

Apar
Industries
was
founded in the year 1958
and operates in the diverse
field of electrical and
metallurgical engineering. It
is a US$ 850 million
diversified Company and
provides
value
added
products and services in
Power
Transmission
Conductors,
Petroleum
Specialties and Power &
Telecom Cables.
The product portfolio of the company comprises of Speciality Oils & Lubricants, Aluminium &
Alloy Conductors, Electric & Telecom cables, Automotive Lubricants, Thermoplastic
Elastomers.

Q1 Results Update
The net sales of the company for Q1FY17 stood at Rs. 1077.20 crore against Rs. 1236.70
crore on a yoy basis, de-growth of 12.9%.
The Operating Income of the company for Q1FY17 stood at Rs. 1081.90 crore against Rs.
1243.90 crore on a yoy basis, de-growth of 13%.
EBITDA rose by 25.6% on a yoy basis and stood at Rs. 113.40 crore in Q1FY17 against Rs
90.3 crore.
PAT for Q1FY17 grew by 77.4% and stood at Rs. 45.60 crore against Rs. 25.70 crore in the
same period last year.

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Investment Rationale

Market Leader in key Segments Apar is amongst the Top 5 largest producer in
conductors and specialty oils in the world and has 60% market share in power
transformer oil and 40% in distribution transformer oil in India.

Pioneer in Aluminum alloy rod and conductors in India and manufactures over 400
different types of Specialty Oils. It is a preferred supplier to over 80% of its specialty oil
customers in the country and supplies conductors to all top global turnkey operators.

Apar has recently launched Indias most advanced E-beam facility which will help in
making superior cables.

Driving growth through innovation Pioneer in adoption of new technologies &

development of value added products creating new market segments through in-house
research & development programmes.

The company has multi-year relationships with Indian and global majors and exports to
100 countries across the globe. For the FY16 34% of the total sales of the company
was from exports. It is the largest Indian exporter for conductors.

The company has a strong order book of Rs. 1606 crore as on June 30, 2016 with 36%
export orders.

The company has planned capex to expand power cable capacity to cater to increasing
demand and improve profitability. The companys new plant Orissa is expected to be
operational by Oct 2016.

With strong focus on 247 power for all, revival of Discoms through UDAY,
amendments to the national tariff policy and strong capital expenditure in Transmission
and Distribution (transmission projects worth Rs. 1 lakh Crores were launched in the
year), Indias power sector is well poised for take-off. As the benefits of these
measures gradually percolate down, Apar, with 70% of its revenue coming from the
power sector, and a leading presence in Indias Transmission & Distribution (T&D)
sector stands to strongly benefit. Also Transformer orders of around Rs. 13,070 Crores
are expected to materialize in FY17.

Investment Opinion
Apar Industries share price made a recent high of Rs. 633.90 and is currently trading at Rs.
539 at a P/E of 11.99. The market capitalization of the stock is Rs. 2092.68 crore. We
recommend buying the stock at its CMP of 539 for a target of 634.

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Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways
are solely the personal views of the research team. Users are advised to use the data for the
purpose of information and rely on their own judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also
engaged in Investment Advisory Services and Portfolio Management Services. Dynamic
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Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst:
DYNAMIC/its Associates/ Research Analyst/ his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject
company.

Do not have any other material conflict of interest at the time of publication of the
research report

Have not received any compensation from the subject company in the past twelve months

Have not managed or co-managed public offering of securities for the subject company.

Have not received any compensation for brokerage services or any products / services or
any compensation or other benefits from the subject company, nor engaged in market
making activity for the subject company

Have not served as an officer, director or employee of the subject company

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