APL Apollo Tubes Q4FY26: 925 KT volume, ₹5,500/t EBITDA

Key takeaway from FY26 updates

APL Apollo Tubes flagged FY26 as a year where it focused on protecting profitability and margins even as volume visibility turned challenging. The company reported Q4 sales volume of 924,881 tonnes, up 9% year-on-year and 1% quarter-on-quarter. Management said EBITDA per tonne was above ₹5,500 in Q4, and highlighted a 37% ROC for the full year. It also pointed to a negative working capital cycle for FY26, along with operating cash flow of ₹2,000 crore and free cash flow of ₹1,300 crore for the full year. The company said it closed the year with a net cash balance of over ₹1,500 crore on its books. Management reiterated that the long-term plan to reach 8 million tonnes of capacity by FY28 remains on track.

Q4FY26 operating performance: volume, margins, and cash

In Q4, the company’s 924,881 tonnes volume figure indicated continued scale-up, with management highlighting improved margins supported by brand positioning and market leadership. While April was described as slow for volumes, management said profitability in terms of EBITDA per tonne was running better than what it had guided earlier. The company also indicated it would try to protect full-year target numbers in terms of absolute EBITDA that it had guided previously. The commentary suggested a deliberate tilt towards profitability rather than pushing volumes in a softer demand environment. FY26 cash metrics stood out, with management citing ₹2,000 crore of operating cash flow and ₹1,300 crore of free cash flow. It also stated that the FY26 working capital cycle was negative.

Q3FY26: record volumes and a tougher raw material setup

For Q3FY26, a brokerage note said APL Apollo delivered record sales of about 917 KT, up 11% year-on-year, indicating sustained volume momentum. The same note flagged a near-term margin risk due to hot-rolled coil (HRC) prices rising about 8% in the last 20 days after a safeguard duty on steel imports. Against that backdrop, the brokerage projected EBITDA/MT of ₹5,000 for Q3 compared with ₹5,228 in Q2. Separately, management described Q3 as its best quarter ever after a weak profitability phase in the previous quarter, citing all-time highs in sales volume, EBITDA, and net profit. It also referenced a prior commitment to deliver 10% quarter-on-quarter volume growth and an EBITDA range of ₹4,000 to ₹4,500 per tonne. Management said it was working to make up for the earnings miss in Q2 through Q3 and Q4.

Q2FY26: profitability beat and guidance reiterated

In Q2FY26, the company reported EBITDA per tonne of ₹5,228, supported by a richer product mix, improved gross margins, higher value-added product contribution, and lower ESOP costs, as cited in the report. Revenue rose about 9% year-on-year, while volumes grew 13% year-on-year, though revenue was slightly below an expectation mentioned in the same note due to softer realisations linked to lower HRC prices. Management reiterated confidence in achieving 10% to 15% volume growth in FY26 and maintaining EBITDA per tonne in the ₹4,600 to ₹5,000 range. The report also noted guidance for stronger second-half volumes, with expectations of around 900,000 tonnes in Q3FY26 and 950,000 tonnes in Q4FY26. A separate highlight stated EBITDA per tonne sustained above ₹5,000 for the second consecutive quarter. Another management comment indicated the December run-rate was around a million tonnes.

Q1FY26: strong YoY growth but sequential softness

In Q1FY26, APL Apollo posted year-on-year gains but saw quarter-on-quarter declines across key metrics. Sales volume rose 10% year-on-year to 794,000 tonnes, while revenue increased 4% year-on-year to ₹5,170 crore. EBITDA rose 23% year-on-year to ₹370 crore and net profit increased 23% year-on-year to ₹240 crore. However, quarter-on-quarter, sales volume fell 7%, revenue slipped 6%, EBITDA declined 10%, and net profit dropped 19%. EBITDA per tonne came in at ₹4,683, up 12% year-on-year but down 4% sequentially. Analysts attributed EBITDA/tonne being below an estimate of ₹4,900 to operating deleverage and a one-off ESOP expense of ₹300 per tonne.

Full-year volume targets and profitability stance

Management communicated a full-year sales volume target of 3.1 million to 3.2 million tonnes. It also said absolute EBITDA for the full year should be slightly better than last year, as it worked to recover after weak Q2 profitability. The company’s stated approach in the current environment is to prioritise profitability rather than pushing volumes when forecasting becomes difficult. Management linked margin resilience to being a market leader with strong brand positioning. It also noted that despite slower volumes in April and early May, profitability trends were stronger than earlier guidance in terms of EBITDA per tonne.

Profit trend snapshots cited in the data

The provided data also cited a profit trajectory: ₹1,203 crore for TTM, ₹757 crore for Mar 2025, and ₹733 crore for Mar 2024. These figures were presented as profit numbers, indicating an improving trend over the period cited. Separately, the input included a line stating net profit of “₹3.5” with 21% YoY and 14% QoQ growth, but without a unit or timeframe attached in the text. Where quarterly profitability was discussed with clearer context, management emphasised Q3 as a high point after a weak prior quarter.

Key numbers table: quarter-wise metrics mentioned

Market impact: what the numbers imply for investors

The data points show APL Apollo operating in a margin-sensitive setup where steel price moves can quickly influence spreads. HRC’s reported 8% rise in a short span, linked to a safeguard duty on imports, was explicitly flagged as a reason for near-term margin pressure in Q3 versus Q2. At the same time, the company’s EBITDA per tonne staying above ₹5,000 for two consecutive quarters, and management’s comment of ₹5,500-plus in Q4, suggests the business is attempting to defend profitability through product mix and pricing discipline. Cash metrics cited for FY26, including ₹2,000 crore operating cash flow and ₹1,300 crore free cash flow, signal strong cash conversion in the period mentioned. Management’s stated preference to protect margins over chasing volume also frames how it may respond to weaker monthly demand patches.

Conclusion

APL Apollo’s reported FY26 narrative combines steady volumes, EBITDA per tonne sustained above ₹5,000, and strong FY26 cash generation, alongside a clear management focus on protecting margins. Q4 volumes reached 924,881 tonnes with EBITDA per tonne above ₹5,500, and the company cited a 37% ROC and a net cash position of over ₹1,500 crore. In the near term, HRC price moves and the impact of trade policy actions such as safeguard duty remain key variables referenced in the updates. The company’s next major milestone, as reiterated by management, is progressing towards an 8 million tonne capacity target by FY28.