Apollo Pipes Q4 FY26: Volumes bounced back, but margins stayed under pressure

Apollo Pipes closed Q4 FY26 with a clear split between volumes and profitability. Consolidated revenue for the quarter rose to 347 crore, up 10% year on year and 40% sequentially. Sales volume jumped to 31,366 tonnes, up 21% year on year and 24% sequentially. But EBITDA fell 25% year on year to 18 crore, taking EBITDA margin down to 5.2%.

The quarter also marked a return to profitability after a loss in Q3 FY26, with PAT after minority interest reported at 1.0 crore. Still, the weak margin profile and sharply lower full-year returns underscored how FY26 was a difficult year for the construction material space.

FY26 in one line: Higher volumes, lower earnings

For FY26, consolidated sales volume increased 4% to 1,03,752 tonnes. Revenue declined 6% to 1,105 crore. EBITDA fell to 66 crore, and EBITDA margin dropped to 6.0% from 8.1% in FY25. PAT after minority interest came in at 7.5 crore versus 32.6 crore in FY25.

Management attributed the weak year to volatile PVC resin prices, prolonged unseasonal rainfall, subdued infrastructure spending, and global geopolitical tensions. In the concall, management also cited inventory write-downs, aggressive pricing, and fixed costs for newer verticals as drivers of the EBITDA decline.

What hurt margins in Q4

During the call, management outlined three main reasons for the weaker gross margin despite higher realizations.

First, the company chose to stay aggressive on pricing to sustain dealer confidence and build volume momentum, rather than raising pricing opportunistically as PVC prices moved.

Second, costs linked to building the window profile business were incurred in the quarter, including market development activities such as sampling.

Third, the company cleared older finished goods inventory to free up space and support a higher volume base.

PVC pricing remained a key swing factor. Management declined to give directional guidance on resin prices, noting uncertainty, but stated it expects near-term movement to remain within a plus or minus 5% band.

Balance sheet and cash flow: capex kept free cash flow negative

FY26 also showed a shift in the balance sheet. Net cash and bank balance declined from 138 crore to 84 crore. Debt increased from 92 crore to 123 crore. The cash flow statement showed operating cash flow of 68 crore in FY26, while capex remained elevated at 153 crore, keeping free cash flow negative at -111 crore.

This translated into a movement from net cash of 46 crore at the end of FY25 to net debt of 40 crore at the end of FY26.

Strategy check: capacity and portfolio expansion continues

Apollo Pipes continues to push a multi-year growth plan centered around capacity expansion, product diversification, and brand building.

The presentation indicates current capacity of 240,000 tonnes, comprising 179,000 tonnes from Apollo plants, 58,000 tonnes from Kisan Mouldings (factored at 100% capacity), and 3,000 tonnes from window and door profiles. It also outlines a plan to reach 288,000 tonnes in two years through an 18,000 tonne greenfield Varanasi plant by FY27, a 2,000 tonne expansion in window and door profiles by FY27, and 28,000 tonnes of brownfield expansion.

On products, the company describes a portfolio of 3,000 plus SKUs across plumbing, agriculture, borewell, sewerage, water supply, industrial, water storage, adhesives, bath fittings, home solutions, and doors and windows.

A notable strategic development is the partnership with Lubrizol for CPVC resin manufactured using TempRite technology. Management stated CPVC grew around 10% in FY26 and they expect more than 20% growth in FY27 in the CPVC segment.

Kisan Mouldings: ramp-up and potential merger

Kisan Mouldings remained a weak spot in near-term profitability. In the standalone Q4 FY26 split shared in the presentation, Apollo Pipes ex-Kisan posted EBITDA of 19 crore at a 6.9% margin, while Kisan recorded EBITDA of -1 crore at a -1.5% margin and PAT of -3.3 crore.

Management said the immediate objective is to lift Kisan from underutilization toward a higher and more sustainable EBITDA per tonne. In the concall, management also indicated it is working on timelines for merging Kisan into Apollo Pipes, though no firm schedule was provided.

Outlook: management turns bullish on FY27 volumes

The strongest explicit near-term guidance in the transcript was the target of 400 crore plus revenue in Q1 FY27. Management stated it is carrying forward the aggressive market approach from the last few months of FY26 into FY27, and it expects demand to improve given the low base in the industry.

The presentation reiterates a target of around 25% plus revenue growth CAGR over the next three years. In the concall, management also discussed an ambition to grow at 35% revenue CAGR over the next four to five years, driven by plant ramp-ups, portfolio expansion, and group synergies.

The company guided capex requirement for FY27 at around 100 crore, with focus on enabling the Kisan plant for higher revenue potential and continuing brownfield expansions.

Key takeaways

Apollo Pipes exited FY26 with stronger volumes but weaker margins, a higher working capital cycle, and a move from net cash to net debt due to sustained capex and negative free cash flow. Management has responded with a volume-first strategy, continued capacity expansion plans, and a push into value-added categories including CPVC solutions and window profiles. The near-term reset point is Q1 FY27, where management has guided to 400 crore plus revenue, while medium-term execution will be judged by margin recovery and improved returns on capital.