Strong Buy Of Apollo TriCoat Tubes For 32% Gain: PCG/HNI Research Report

Access to advanced Tricoat technology:

It is the first company in India and amongst the 4-5 companies globally which produces coated pipes using the galvant and tricoat process. The technology allows the production of galvanized steel pipes, tubes and other products in a continuous single line process based on high quality standards.

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With access to the advanced technology Co. has competitive edge over its peers as Tricoat products have greater strength, eco-friendly nature, extended life (high corrosion resistance) and enhanced load bearing capacity.

Currently, Apollo Tricoat has a total installed capacity of 250,000 MTPA, which primarily manufactures specialized and niche products (read high margin) like Apollo Signature, Apollo Chaukhat, Apollo Elegant, Apollo Tricoat and Apollo Plank.

Furthermore, the Company will be launching three other new innovative brands — Apollo Hybrid, Apollo Scaff and Apollo Alpha in the upcoming quarters which will add capacity of 50,000 MTPA. Going ahead, these said new product launches and expanded capacity at manufacturing locations will enable a healthy and sustainable volume performance along with elevated EBITDA margin.

Apollo TriCoat Tubes Limited (formerly known as Best Steel Logistics Limited) is a subsidiary of Shri Lakshmi Metal Udyog, which is a wholly owned subsidiary of APL Apollo Tubes Ltd., one of India’s leading branded steel tube manufacturers. It offers steel products such as closed door frames, designer pipes that can be used in furniture, designer hand railings, roofing, fencing and also in electrical conduiting.

The Company has established its first greenfield manufacturing facility in Malur, Bangalore with an initial capacity of 150,000 MTPA of In-line Galvanized and Designer Galvanized pipes. It has further expanded its value-added product portfolio by establishing 100,000 MTPA capacity of Narrow sections and Door Frames at Dujana, UP. It is in the process of adding another 50,000 MTPA by the end of FY21 to meet the rising demand of its innovative products.