APL Apollo Tubes (APLAPOLLO)

FairStock Score: 52/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• High return ratios: ROE 27.13%, ROCE 22.36%, with low leverage at 0.16 D/E
• Consistent growth: 5-year revenue CAGR of 19.47% and latest sales growth of 17.50%
• Strong financial health: Piotroski F-Score 8/9, Altman Z-Score 9.04, and FCF of ₹838 Cr
• Latest quarter profitable: sales ₹5,815 Cr and net profit ₹310 Cr

Concerns

• Very expensive valuation: P/E 54.33, P/B 13.34, EV/EBITDA 35.16, PEG 2.28
• Market price ₹2,022.35 is above DCF intrinsic value of ₹1,616.96 and far above Graham Number of ₹379.84
• Margin of safety is extremely negative at -488.30%
• Low dividend yield of 0.26% and promoter holding of 28.27% offer limited minority-investor comfort

AI Analysis

Let me start with the business. APL Apollo Tubes earns excellent returns on capital: ROE of 27.13%, ROCE of 22.36%, and a debt-to-equity of just 0.16. The Piotroski F-Score of 8 out of 9 suggests the financials are sound, and the Altman Z-Score of 9.04 gives a strong margin against distress. Free cash flow of ₹838 Cr supports the reported earnings. Revenue has compounded at 19.47% over five years, and the latest quarter shows sales of ₹5,815 Cr with net profit of ₹310 Cr. That is a well-run grower. But Ben Graham taught me that price is what you pay, value is what you get. At ₹2,022.35, the stock trades at 54.33 times earnings, 13.34 times book value, and 35.16 times EV/EBITDA. The DCF intrinsic value of ₹1,616.96 is below the market price, and the Graham Number of ₹379.84 is far lower. The stated margin of safety is a deeply negative 488.30%. That is not the margin Graham would want. A PEG of 2.28 tells me the market has already paid up for the 17.50% sales growth and the 92.42% profit jump. The FairStock Score of 58/100 also says steady, not cheap. This is a quality fast grower, but at this price it is a bet on flawless future execution, not a margin-of-safety investment. The 52-week range of ₹1,578 to ₹2,301.40 suggests Mr. Market can give better entry points. With a dividend yield of only 0.26%, income is not the compensation for waiting. I will keep my powder dry until the price gives me more room.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer