Financial Performance Highlights

  • Achieved best-ever quarterly performance with sales volume of 960,000 tons in Q2 FY27
  • EBITDA per ton reached ₹6,000 in Q2 FY27
  • Net cash position increased to ₹16 billion as of September 2026 (from ₹14 billion in June 2026)
  • Working capital days maintained at zero
  • H1 FY27 other income was approximately ₹80 crores

Operational Performance

Volume Performance:

  • APL Apollo brand and roofing products showed 20% year-on-year volume growth in H1 FY27
  • UAE operations remained disrupted at only 40% of normal capacity due to Middle East geopolitical situation
  • Export sales affected by high container freight prices

Product Mix & Margins:

  • Focus shifted to high-margin APL Apollo brand and roofing products away from low-margin SG Premium business
  • Light structures contributed 25% to APL Apollo mix with lower realizations
  • Roofing products capacity at 700,000 tons annually (175,000 tons quarterly)
  • Current roofing product volume run rate: 135,000 tons in Q1, targeting 175,000 tons in upcoming quarters
  • Roofing product application mix: 50% housing, 25% commercial/industrial, 25% other industrial applications

Cost Efficiency Initiatives

  • Reduced power cost to ₹6.2-6.3 per unit (targeting ₹5 per unit next year)
  • Reduced freight cost by ₹150/ton in Q2
  • Employment costs expected to reduce with volume ramp-up

Capacity Expansion & Capex

  • Targeting 7 million tons greenfield + brownfield capacity plus 1 million tons de-bottlenecking capacity within two years
  • Capex spending: ₹400 crores in H1 FY27 (vs. ₹600 crores for full FY26)
  • Dubai capacity expansion to 500,000 tons by March 2027 (from current 300,000 tons)
  • Expected EBITDA from Dubai operations: ₹8,000-10,000 per ton when operational

Guidance and Outlook

FY27 Guidance:

  • 20% absolute EBITDA growth target maintained
  • Double-digit volume growth expected in APL Apollo brand and roofing products
  • Consolidated volume growth guidance revised due to UAE disruption
  • Targeting absolute EBITDA of ₹2,200 crores for FY27

Q3 FY27 Outlook:

  • EBITDA per ton expected to exceed ₹6,000
  • October performance described as "good" and above guidance
  • Roofing products volume target of 175,000 tons for the quarter

Long-term Outlook (FY28):

  • Potential for ₹3,000 crores EBITDA if Dubai operations recover and steel availability improves
  • Target EBITDA per ton of ₹6,000-6,500 for FY28

Cash Flow and Balance Sheet

  • H1 FY27 free cash flow generation impacted by ₹400 crore capex and dividend payments
  • Expected free cash flow for FY27 to exceed FY26's ₹1,300 crores
  • Dividend payments made in August-September 2026
  • Financial assets of ₹57 crores vs. ₹282 crores in March 2026 due to reclassification of long-term FDs to current assets

New Business Initiatives

  • Commissioned specialized tube mill producing sizes up to 250x250mm diameter with 16mm thickness
  • Developing products for Defense and Aerospace sectors, with samples submitted to authorities
  • Working on items for ISRO and DRDO applications
  • Developing products for 1000 sq. ft. big sections

Market Conditions

  • Domestic steel shortage affecting production capacity
  • Container freight prices affecting export profitability
  • Price premium maintained for APL Apollo products (₹70,000 vs. competitors' ₹68,000-69,000 for black pipes)
  • Conversion margin of ₹10/kg on HR coil priced at ₹60,000

Segment Performance

Dubai Operations:

  • Currently operating at 100,000 tons per annum run rate vs. 500,000 tons capacity by March 2027
  • No current losses despite operational challenges
  • Recovery dependent on geopolitical stability and container freight normalization

SG Premium Business:

  • Low-margin segment intentionally scaled back
  • Capacity available to sell 200,000 tons if market conditions improve
  • Would contribute to absolute EBITDA but reduce EBITDA per ton metric to ₹5,500-5,600

Q2 FY27 Financial Details

  • Interest cost increased quarter-on-quarter
  • Other income declined QoQ due to foreign currency movement impacts
  • No material inventory benefits (only 50,000-60,000 tons of spare inventory including scrap)