APL Apollo margin rebounds, but remains well below sector peers
Revenue growth outpaced expenses, while a higher tax rate limited the conversion of 50.89% pre-tax profit growth into 35.93% net profit growth.
Filed 02 May 2026, 15:48 IST · after market close · APL Apollo Tubes Ltd (APLAPOLLO)
Key takeaways
- Standalone operating margin rose 1.81 percentage points year on year as revenue grew 12.23%, faster than expenses at 10.08%.
- Net profit growth of 35.93% lagged the 50.89% rise in pre-tax profit as the tax rate increased 8.34 percentage points year on year.
- The 7.19% operating margin remained 8.47 percentage points below the 15.66% median for 71 Industrials peers that had reported.
Price around the results
Q4FY26 brought a clear margin recovery
APL Apollo Tubes reported standalone revenue growth of 12.23% year on year, while expenses rose 10.08%; that cost gap lifted operating margin by 1.81 percentage points to 7.19%. Sequential momentum was stronger, with revenue up 9.70% and expenses up 7.65%, widening operating margin by 1.77 percentage points. This reversed the decline from 5.74% in Q1FY26 and 5.73% in Q2FY26 to 5.42% in Q3FY26.
Tax reduced the conversion of operating gains
Operating profit rose 50.02% year on year and pre-tax profit increased 50.89%, but net profit grew 35.93% as the tax rate climbed to 24.24% from 15.90%. Sequentially, the tax rate fell 3.23 percentage points, helping net profit rise 71.29% against 63.99% growth in pre-tax profit. Other income contributed 11.05% of pre-tax profit, so reported earnings included a meaningful non-operating component.
Margin improved, but sector gap remains wide
The current margin was still 8.47 percentage points below the 15.66% median among 71 Industrials peers that had reported the quarter, placing the company fifth from the bottom. The quarter therefore marks a rebound from Q3FY26 rather than a return to the sector's reported profitability level.
Management outlined capacity and sustainability plans
Management said it plans to take total capacity to 8 Mn tons by FY28 through 2 Mn tons of greenfield and brownfield additions and 1 Mn ton of debottlenecking. The company said it expects structural steel tube market share as a share of steel consumption to rise to 8% by FY31 from 6% in FY26. Management also said renewable energy contribution is targeted at 47% by 2030 from 38%, and that it has introduced environmentally friendly products.
The initial stock reaction was weaker than usual
The stock fell 1.68% on the first reaction day and 1.81% by the next day, compared with a median absolute post-results move of 1.25% across its last eight results. That response was weaker than the stock's usual pattern, which was positive after six of those eight results. The stock was up 2.35% after five days but down 3.31% after 30 days.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,216 cr | ₹3,843 cr | +9.70% | +12.23% |
| Other income | ₹30 cr | ₹17 cr | +71.84% | -13.71% |
| Expenses | ₹3,913 cr | ₹3,635 cr | +7.65% | +10.08% |
| Operating profit | ₹303 cr | ₹208 cr | +45.59% | +50.02% |
| Operating margin (%) | 7.19% | 5.42% | — | — |
| Interest | ₹31 cr | ₹29 cr | +4.13% | +13.96% |
| Depreciation | ₹32 cr | ₹31 cr | +1.77% | +4.11% |
| Profit before tax | ₹271 cr | ₹165 cr | +63.99% | +50.89% |
| Tax | ₹66 cr | ₹45 cr | +44.71% | +130.05% |
| Net profit | ₹205 cr | ₹120 cr | +71.29% | +35.93% |
| EPS (₹) | ₹7.39 | ₹4.31 | +71.46% | +35.85% |
Operating margin of 7.19% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.68% | -2.19% |
| Next session | -1.81% | — |
| 5 sessions | +2.35% | +3.11% |
| 15 sessions | -0.34% | — |
| 30 sessions | -3.31% | — |
Volume on the results session was 3.55× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company expects structural steel tube market share as a percentage of steel consumption to rise to 8% by FY31 from 6% in FY26.
- The company targets renewable energy contribution of 47% by 2030, up from 38%.
Expansion
- The company plans to expand total capacity to 8 Mn tons by FY28 through 2 Mn tons of greenfield and brownfield capacity and 1 Mn ton of debottlenecking.
New products
- The company introduced new environmentally friendly products.
What to watch
- Whether standalone operating margin holds above 7.19% after the Q4FY26 rebound.
- Whether the tax rate moves back towards 24.24% or remains above the 15.90% year-ago level.
- Progress towards the management-stated 8 Mn tons total capacity plan by FY28.