Antique Stock Broking Initiates BUY on Apar Industries: Rs 10,740 Target Set, 20% Upside Predicted on Global Power Boom!

Apar Industries Gets Strong 'Buy' Rating from Antique Stock Broking

Antique Stock Broking has launched its analysis of Apar Industries Ltd. with a definitive 'Buy' rating, setting an ambitious target price of ₹10,740 per share. This forecast suggests a potential upside of approximately 20% from the company's recent closing price, signalling significant investor optimism. The core of Antique's recommendation lies in the expected tailwinds from sustained growth in global power sector investments.

The Core Issue

Apar Industries is recognized as a premier global manufacturer of aluminium and alloy conductors, a key exporter and producer of renewable and speciality cables. The company boasts a diversified product portfolio and a wide geographic footprint, with exports contributing a substantial 30-40% to its revenues. Antique highlights that Apar Industries' growth strategy is built upon premiumisation, expanding its export markets, and securing a strong position in rapidly growing industry segments.

Financial Implications

The brokerage forecasts that Apar Industries will achieve a consolidated revenue compound annual growth rate (CAGR) of 18%, EBITDA CAGR of 21%, and Profit After Tax (PAT) CAGR of 25% over the financial years 2025 to 2028. While the stock experienced a significant re-rating between 2022 and 2024, it has seen underperformance in the past year due to investor concerns about tariff-based trade protectionism. Antique views these concerns as temporary headwinds, maintaining that the fundamental growth drivers remain robust.

Expert Analysis

Antique points to a global energy sector inflection point, fueled by a multi-decade capital expenditure supercycle in the Power Transmission & Distribution (T&D) sector. Demand for conductors, cables, and transformer oils is anticipated to surge, driven by increasing investments in data centres, renewable energy projects, and the expansion of electric mobility infrastructure. Furthermore, Apar Industries holds the distinction of possessing the highest number of Underwriters Laboratories (UL) certifications among Indian cable manufacturers, granting it access to the critical US market.

Valuation and Market Position

At approximately 22.5 times its estimated FY28 earnings, Antique notes that Apar Industries is trading at a discount compared to its frontline cable manufacturing peers, such as Polycab and KEI Industries. The company's extensive international presence spans Europe, Africa, Asia (including the Middle East), and the Americas, underscoring its global reach. Exports formed a significant portion of its revenue in FY25, ranging from 24% for conductors to 44% for speciality oils.

Future Outlook

Looking ahead, Antique believes that the global energy transition and continuous infrastructure expansion will create substantial growth opportunities. These factors are expected to position Apar Industries favourably to capitalize on the prevailing tailwinds, reinforcing its potential for sustained expansion and profitability. The company's focus on technically advanced products meeting stringent global standards further enhances its competitive edge in international markets.

Impact

This 'Buy' rating and target price initiation by Antique Stock Broking is expected to positively influence investor sentiment towards Apar Industries. It could lead to increased demand for the stock, potentially driving its price towards the ₹10,740 target. The positive outlook on the global power sector also suggests potential benefits for related industries reliant on T&D infrastructure development. Impact Rating: 7/10.

Difficult Terms Explained

• Initiated Coverage: When a stock analyst or brokerage firm begins to research and provide recommendations on a company's stock for the first time.
• 'Buy' Rating: An investment recommendation suggesting that investors should purchase a particular stock because its price is expected to increase.
• Target Price: The price at which analysts expect a stock to trade within a specific timeframe, typically one year.
• Tailwinds: Favorable conditions that help a company or stock price to rise.
• Conductors: Materials that allow electricity or heat to flow easily through them.
• Ebitda: Earnings Before Interest, Taxes, Depreciation, and Amortization – a measure of a company's operating performance.
• Profit After Tax (PAT): The net profit remaining after all expenses, taxes, and interest have been deducted from revenue.
• Compound Annual Growth Rate (CAGR): The mean annual growth rate of an investment over a specified period longer than one year.
• Re-rating: A change in how the market values a stock, typically moving to a higher or lower price-to-earnings (P/E) multiple.
• Tariff-based Trade Protectionism: Government policies, like tariffs, designed to protect domestic industries from foreign competition.
• Underwriters Laboratories (UL) certifications: A safety certification mark for electrical, electronic, and other products from UL, a global safety science company.
• T&D sector: Transmission and Distribution sector, referring to the part of the electricity grid that delivers power from generation plants to consumers.
• Inflection point: A moment when an event starts to have a big effect or changes direction.
• Capex supercycle: A prolonged period of significantly increased capital expenditure by companies, often driven by technological shifts or major industry trends.