Apar Industries

Thanks for bringing this thread back to life @phreakv6, this is actually my first write-up here in VP so correct me if I am wrong.

Sharing my thoughts in short for what you said @Akashdeep, well, you’re right it was known that the conductor margins weren’t here to stay and this has been factored in ever since it was made public is what I believe as a company trading at a considerably lower than Industry PE has to have something anchoring it down.

Now coming to the present, I believe the promoters are brutally honest and conservative as it is better to over deliver than to under deliver which is why the con-call overall is a little underwhelming but when seen in an unfiltered way is confidence inspiring which will eventually lead to the stock to hit new highs in a few days or a couple of months, why? Because when the promoters said Chinese competition is increasing the first thing that came to my mind was opportunity because fishermen go where the fishes are. So they are at the right place and probably doing the right things.

What I understand from the available information is that future growth will be purely based on industrial tailwinds that should be strong and long-lasting. Also, note the promoters have always underplayed their growth forecast and margin guidance, they wouldn’t increase their holding if it was as pale as things have started to look all of a sudden and they wouldn’t have a CWIP of 100cr, and announcing another capex of 450 odd crores.

Some growth triggers according to me –
Domestic – It’s like betting on India’s growth. From Railways to Infra to transportation to Households. Higher power consumption needs higher transmission needs higher load-bearing cables. Many outdated cables will soon be replaced without which utilities can not be used to their fullest.

International – Volumes and guarding clients will drive growth here
Amongst very few suppliers with UL approvals without which you can’t supply cables to the US, Conductor replacements, Subway works, and many other such opportunities. Some that even the company will discover as opportunities open up.

Finally, the valuations have drastically improved after the guidance of roughly 15-20% overall growth consistently with good capex plans and today’s fall which bought us all together here. This fall combined with the jump in EPS has led to a PE drop to a level I would call SALE.
I too believe the right valuation of the stock currently lies between the 3000-3350 range. It might very well go above it and that’s when we need to point our ears up.

Thank you for reading so far I hope I didn’t bore you, I didn’t get into a lot of numbers as all of that is already available everywhere, I think what most of us including me need is conviction and a lot of varying viewing angles.