Apollo Pipes targets Rs 1,000 crore ceramics revenue base

Apollo Pipes Limited is targeting a Rs 1,000 crore ceramics revenue base and Rs 225 crore of earnings before interest, tax, depreciation and amortisation (EBITDA) through four or five acquisitions of profitable Morbi tile assets. On November 6, 2026, management said the plan requires investment of about Rs 400 crore to Rs 500 crore and initially centres on contract manufacturing.

Why is Apollo Pipes entering ceramic tiles?

Apollo Pipes is entering ceramic tiles because management views the category as an extension of building materials that shares architects, contractors and homeowners with plumbing pipes. Management said Morbi manufactures tiles worth about Rs 25,000 crore to Rs 30,000 crore annually, with roughly Rs 10,000 crore of output supplied to the top 10 organised tile brands.

Management said the broader APL Apollo building-products umbrella sells almost Rs 30,000 crore of goods annually in India. Apollo Pipes said it entered tiles during Q2 FY27 through Mazzini Tiles, while management also described the initiative as operating through Apollo Ceramics, a subsidiary of Apollo Pipes. The call did not disclose Mazzini Tiles’ revenue, production capacity or acquisition consideration.

How will Apollo Pipes build its ceramics business?

Apollo Pipes plans to build its ceramics business by acquiring operating, profitable Morbi factories that already supply established brands. Management said the relevant units have the top seven or eight brands registered as customers and already manufacture for them regularly, allowing Apollo Pipes to gain operating experience without initially building a new tile brand.

Management’s disclosed acquisition framework calls for four or five assets and total investment of about Rs 400 crore to Rs 500 crore. It did not attach a target year to the intended Rs 1,000 crore revenue base or Rs 225 crore EBITDA outcome.

The first acquired asset was purchased at about 4.5 to 5 times enterprise value to EBITDA, or EV/EBITDA, according to management. Apollo Pipes said it will assess tile targets in a 4 to 7 times EV/EBITDA range, depending on their product category, EBITDA margin and clientele, while profitability and long-term sales contracts with organised players remain its first screening conditions.

Will Apollo Pipes launch its own tile brand?

Apollo Pipes does not intend to launch its own tile brand in the next few years, management said. Its immediate approach is to provide contract-manufacturing capacity to existing brands through acquired factories, then consider a branded launch only after gaining experience in the tile category.

Apollo Pipes will also retain export operations only where these accompany an acquired asset. Management said the unit already acquired had no export vertical, while one tile unit under evaluation did have exports; it said it would continue and scale activities acquired with a factory but would not independently establish an export vertical for now.

What returns does Apollo Pipes expect from tile acquisitions?

Apollo Pipes is seeking a return on capital of 15% to 20% from the ceramics investments, management said on the November 6 call. Management expects the return timeline not to be extended because it is targeting operational and profitable factories rather than loss-making units or assets undergoing proceedings under the National Company Law Tribunal.

The Rs 225 crore EBITDA objective accompanies the Rs 1,000 crore intended revenue base, but management did not disclose an acquisition timetable, asset-level profit forecasts or a ceramics margin target. Apollo Pipes also did not state how it would finance the Rs 400 crore to Rs 500 crore ceramics programme; its commitment to use internal cash flow without balance-sheet leverage was stated in relation to pipe-capacity expansion.

How does ceramics fit alongside Apollo Pipes' pipe business?

Apollo Pipes is pursuing ceramics while planning to raise pipe capacity from 240,000 tonnes to 288,000 tonnes over the next two years. In Q2 FY27, consolidated sales volume increased 13% year on year to 24,501 tonnes, revenue rose 31% year on year to Rs 309.6 crore, and EBITDA recovered to Rs 11.5 crore from Rs 3 crore in Q1 FY27, producing a 3.7% margin.

The pipe portfolio remains led by unplasticised polyvinyl chloride, or UPVC, at 45% of sales, followed by chlorinated polyvinyl chloride, or CPVC, at 15% to 20%; polypropylene random copolymer, or PPR, was below 5%. Apollo Pipes said standalone EBITDA, excluding Kisan, rose to Rs 7,000 per tonne in Q2 FY27 from below Rs 4,000 per tonne in Q1 FY27, with a target of Rs 9,000 to Rs 10,000 per tonne in the second half of FY27.

Kisan remains a profitability issue in the pipe business, although its EBITDA loss narrowed to about Rs 3,700 per tonne in Q2 FY27 from Rs 9,000 per tonne in Q1 FY27. Management aims to bring Kisan to break-even over the next six months, after its quarterly volume increased from about 3,000 to 4,000 tonnes at acquisition to 5,000 to 6,000 tonnes.

Conclusion

Apollo Pipes is using profitable Morbi acquisitions to establish a ceramics platform focused first on contract manufacturing for established brands rather than an immediate consumer-facing tile launch. The plan combines an intended Rs 400 crore to Rs 500 crore investment with four or five assets, a Rs 1,000 crore revenue base and Rs 225 crore EBITDA, alongside the company’s separate effort to improve pipe-business profitability.

The next disclosed items to watch are further tile acquisitions over the next few quarters, including whether any purchased factory brings an export operation, and progress toward the 15% to 20% return-on-capital objective. Management also plans to expand pipe capacity to 288,000 tonnes within two years and targets Kisan’s move from a Rs 3,700-per-tonne EBITDA loss in Q2 FY27 to break-even within six months.