Apar Industries reported strong June quarter results with a 29% revenue increase, supported by high realizations in its transformer oil and conductor segments. The company maintains a healthy order book of ₹102 billion, showing strong demand in both domestic and export markets. Investors may monitor how the company manages raw material price volatility, which recently led to a ₹0.9 billion inventory provision.
Detailed Coverage
Apar Industries has announced strong financial results for the June quarter of the 2026-27 financial year, characterized by significant growth in both revenue and profit margins. The company reported a 29% year-on-year revenue increase, driven by strong demand across its transformer oil, cables, and conductor business units.
Segment Performance and Raw Material Impact
The transformer oil segment emerged as a key contributor during the quarter. Despite a 14% drop in volumes, the segment saw a 35% revenue jump compared to the previous year, largely due to higher prices. The company reported an EBITDA of Rs 3.3 billion for this segment. However, management took a proactive step by setting aside a provision of Rs 0.9 billion. This decision reflects the company’s anticipation of potential inventory losses if oil prices trend downward in the coming quarters, highlighting a risk investors should watch.
The conductors business also showed resilience, growing revenue by 20% year-on-year. While high aluminum prices caused some customers to delay deliveries, the company successfully offset this by shifting its product mix toward higher-value, premium offerings. This premium shift now accounts for over half of the conductor segment's total sales.
Growth in Cables and Order Book Expansion
The cables division recorded a 29% year-on-year growth, with a particularly strong 60% expansion in the domestic market. A key growth driver here is the company's entry into the data center market. Apar Industries has received approvals from major global technology firms to export copper cables for their data center projects, which could serve as a long-term growth catalyst if order execution remains steady. The segment’s profit margin stood at 10.6%.
Overall, the company’s consolidated order book reached Rs 102 billion, marking a 31% increase compared to the previous year. Exports remain a significant part of the business, accounting for 57% of these orders. Recent inflows include Rs 28 billion from two overseas utility projects, which are expected to be completed over the next 18 to 48 months.
Investors may monitor the execution timeline of these large projects, particularly in light of global commodity price fluctuations that can impact profitability. The balance between rising order inflows and the potential for cost increases due to volatile raw material prices remains a primary factor for the company’s future margin stability.