APL Apollo Tubes: Decent fundamental outlook

3 авг.

Fundamental thesis
-Guidance for higher capacity and production in '25 - '26
-Company fundamentals have constantly outperformed previous periods
-Good return ratios (Avg 6yr ROE > 30%/ROCE >29%)
-Stock trading at July 23 level with all fundamentals outperforming previous periods
-Increase in FII and DII holdings
- Considerably low risk play as it one of the biggest steel products manufacturers simply facing cyclical issues like with every commodity related business

Technical
Stock at 1yr support with previous bounce backs seen at this level
Daily RSI at 40

Valuation
Centrum priced the stock at 1670 INR (13% upside)
ISec priced at 1800 INR (22% upside)
My analysis gave a px tgt of 1806 INR (22% upside)
Avg upside of 17% - 18%
With a good margin of safety a leveraged play is possible, leading to potential 40 - 50 % returns on the stock

Target
I would keep my TP at 1630Rs (upside of 10%) and will enter with leverage