Apar Industries: Target Price Raised to Rs 13,309 by Prabhudas Lilladher

Apar Industries Sees Improved Demand Visibility Across Conductors and Cables

Prabhudas Lilladher has revised its earnings per share (EPS) estimates for Apar Industries, factoring in improving premium product mix in conductors, healthy demand visibility across conductors and cables, and higher growth capital expenditures across key businesses. The research report suggests that the company's conductors' business has continued to benefit from renewable evacuation, reconductoring, grid modernization, and upcoming high-voltage direct current (HVDC) opportunities, with premium products contributing over 50% of the order book, valued at Rs76.7 billion.

The company has reported a 26.7% year-over-year (YoY) revenue growth, while the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted by 93 basis points (bps) YoY to 7.9% (adjusted for one-offs), likely due to elevated freight and insurance costs, higher specialty polymer prices, and supply chain disruptions arising from the Middle East conflict. The cables business has also witnessed healthy traction across renewables, utilities, railways, defence, and data centers, with the company already supplying to multiple hyperscale US data-center projects.

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The research report values the Conductors/Cables/Specialty Oils segment at a price-to-earnings (PE) ratio of 40x/40x/15x for March 2028 earnings estimates, arriving at a revised sum-of-the-parts (SoTP)-derived target price of Rs13,309 (earlier Rs9,629). The stock is currently trading at a PE of 52.9x/43.4x on the earnings of FY27/FY28E. Prabhudas Lilladher has downgraded its rating from 'Accumulate' to 'HOLD' given the rise in stock price.