Brokerage firm Prabhudas Lilladher has set a price target of Rs 16,674 for Apar Industries. The view is supported by a record Rs 120 billion conductor order book and rising demand from data centers. Investors should balance this growth outlook by monitoring the company's capital spending in its Singapore unit and potential margin volatility.
Brokerage firm Prabhudas Lilladher has initiated coverage on Apar Industries with a price target of Rs 16,674. This outlook is primarily driven by the company’s strong revenue growth and a high-visibility order book. The brokerage has assigned an 'Accumulate' rating, suggesting that while the growth prospects are solid, investors should be mindful of capital allocation and margin stability.
The company’s revenue growth remains a focal point, with a 21.3% increase reported on a year-on-year basis. Operating profit margins also showed improvement, rising by 164 basis points to 9.8%, after adjusting for certain tariff-related factors. A significant portion of this confidence stems from the conductor division, which boasts a record order book valued at Rs 120.3 billion, including Rs 30 billion worth of international utility projects. Furthermore, the cables division is benefiting from expansion in the digital infrastructure space, securing Rs 10 billion in orders from major technology companies like Amazon and Google.
While the growth narrative appears strong, the brokerage report and the company’s recent performance highlight several areas that investors should watch closely. Although the conductor division is growing, it recently experienced a 9.2% dip in volume due to temporary timing issues, though management expects a recovery in the second half of the 2027 fiscal year. Additionally, the company’s specialty oil division saw a notable jump in margins, but leadership has cautioned that these levels may not be sustainable as a long-term average, suggesting that investors should not extrapolate this short-term performance too far into the future.
Another significant development is the company's commitment of up to $100 million in its Singapore-based subsidiary, Petroleum Specialities Pte Ltd. This capital deployment is intended to boost international market penetration and enhance manufacturing capabilities. While this expansion is aimed at long-term growth, it involves substantial capital spending that investors will need to monitor for its impact on cash flow and debt levels over time. As the company continues to pivot toward higher-value products in both the cable and conductor segments, the ability to execute these large-scale international projects without cost overruns or delays will be key to meeting these performance expectations.