APL Apollo: Long-Term Credit Rating Upgraded to CRISIL AA+/Stable

APL Apollo Tubes Limited’s long-term credit rating has been upgraded to CRISIL AA+/Stable from CRISIL AA/Positive, and its short-term rating has been reaffirmed at CRISIL A1+. The upgrade reflects the company’s strong business risk profile, driven by its dominant market position in the ERW segment, brand presence, and growing scale of operations. This is further enhanced by a solid financial risk profile and strong liquidity. The ratings were officially revised on September 30, 2025.

Rating Rationale

CRISIL Ratings has upgraded the long-term bank facilities rating of APL Apollo Tubes Ltd to ‘CRISIL AA+/Stable’ from ‘CRISIL AA/Positive’ and reaffirmed its ‘CRISIL A1+’ rating for short-term bank facilities. The upgrade reflects APL’s robust and improving business risk profile.

Key Strengths

The ratings are underpinned by the following factors:

• Leadership Position: APL Apollo has the largest capacity in the domestic ERW steel pipes market, with a total production capacity of 45 lakh tonnes per annum (ltpa) as of March 31, 2025.
• Diversified Presence: The company has diverse clientele across residential, commercial, industrial construction, infrastructure, and agricultural sectors. It has ten plants in India and one in Dubai, along with expansions planned in Gorakhpur and Kolkata.
• Improved Performance: Product volumes have registered a CAGR of approximately 22% between fiscals 2022-2025. Focus on value-added products has improved profitability.
• Strong Financial Profile: The company maintains a strong financial position, with overall gearing remaining low and interest coverage improving significantly.

Financial Highlights

Key financial highlights from fiscal 2025 include:

• Revenue growth of 14% to Rs 20,702 crore.
• Operating profitability moderated to approximately 5.9%.
• Gearing at 0.15 times.

Outlook

CRISIL Ratings anticipates that APL Apollo’s business risk profile will benefit from sustained volume growth, aided by increased capacities. The financial risk profile is expected to remain robust, supported by a healthy capital structure and strong debt protection metrics.

Rating Sensitivity Factors

Factors that could lead to an upgrade include sustained increases in scale, improved geographic diversification, increased value-added products, and sustenance of a strong financial risk profile.

Conversely, factors that could lead to a downgrade include larger-than-expected debt-funded capex or significant weakening of operating performance.

Liquidity

The company’s liquidity position is considered strong, with annual cash accruals expected to exceed Rs 1,000 crore over the medium term and cash and cash equivalents of Rs.941 crore as of March 31, 2025. The group also has access to working capital limits.

Source: BSE