APL Apollo Tubes Ltd is Rated Strong Buy

Rating Overview and Context

On 13 October 2025, MarketsMOJO revised the rating of APL Apollo Tubes Ltd from 'Buy' to 'Strong Buy', reflecting a significant improvement in the company’s overall mojo score, which rose by 13 points from 75 to 88. This elevated rating places the stock among the top 1% of all companies rated by MarketsMOJO, ranking first within the midcap segment and second across the entire market universe of over 4,000 stocks. The 'Strong Buy' rating signals a compelling investment opportunity based on a comprehensive evaluation of quality, valuation, financial trends, and technical factors.

Here’s How the Stock Looks Today

As of 23 February 2026, APL Apollo Tubes Ltd continues to demonstrate robust fundamentals and strong market performance. The company’s midcap market capitalisation is supported by a solid presence in the Iron & Steel Products sector, where it has consistently delivered growth and profitability. The latest data shows the stock has generated a remarkable 48.09% return over the past year, with a year-to-date gain of 14.20% and a six-month return exceeding 34%. This performance underscores the stock’s resilience and investor confidence amid broader market fluctuations.

Quality Assessment

APL Apollo Tubes Ltd’s quality grade is rated as excellent, reflecting its strong operational and financial health. The company boasts an average Return on Capital Employed (ROCE) of 27.96%, indicating efficient use of capital to generate profits. Net sales have grown at an impressive annual rate of 22.70%, while operating profit has expanded by 24.59% annually, signalling healthy business expansion and margin improvement. Additionally, the company maintains a conservative capital structure with a low Debt to EBITDA ratio of 0.35 times, highlighting its ability to service debt comfortably and maintain financial stability.

Valuation Considerations

While the valuation grade is marked as expensive, the stock’s price-to-book value of 13.2 is considered fair relative to its peers and historical averages. The company’s Price/Earnings to Growth (PEG) ratio stands at a favourable 0.7, suggesting that earnings growth is not fully priced in by the market. This valuation metric, combined with the company’s strong fundamentals, indicates that investors are paying a premium for quality and growth potential, which may be justified given the company’s consistent profit expansion and market leadership.

Financial Trend and Profitability

The financial trend for APL Apollo Tubes Ltd is very positive. The latest quarterly results reveal record-breaking figures, with net sales reaching ₹5,815.13 crores and PBDIT hitting ₹471.79 crores, both the highest in the company’s history. Net profit growth of 42.9% further reinforces the company’s upward trajectory. The company has reported positive results for four consecutive quarters, demonstrating sustained operational momentum. Return on Equity (ROE) is strong at 22.8%, reflecting effective utilisation of shareholder capital to generate earnings.

Technical Outlook

From a technical perspective, the stock is mildly bullish. Despite a slight one-day decline of 0.6% and a one-week dip of 2.75%, the medium-term trend remains positive, supported by a 27.02% gain over three months and a 14.71% rise in the past month. This technical strength complements the fundamental story, suggesting that the stock is well-positioned for further appreciation in the near term.

Institutional Confidence

Institutional investors hold a significant 53.03% stake in APL Apollo Tubes Ltd, indicating strong confidence from knowledgeable market participants. Such high institutional ownership often correlates with better governance, thorough fundamental analysis, and a stabilising influence on the stock price, which can be reassuring for retail investors.

What the Strong Buy Rating Means for Investors

The 'Strong Buy' rating assigned to APL Apollo Tubes Ltd by MarketsMOJO reflects a high conviction in the stock’s ability to deliver superior returns relative to the broader market. This rating is based on a rigorous assessment of the company’s quality, valuation, financial trends, and technical indicators. For investors, it suggests that the stock is expected to outperform due to its excellent fundamentals, robust profit growth, and positive market sentiment.

Investors should note that while the valuation appears on the higher side, it is supported by strong earnings growth and operational excellence. The company’s consistent quarterly performance and strong capital efficiency metrics provide a solid foundation for sustainable growth. Furthermore, the mild bullish technical outlook indicates that the stock’s price momentum is favourable, potentially offering attractive entry points for long-term investors.

Sector and Market Position

APL Apollo Tubes Ltd operates in the Iron & Steel Products sector, a segment that has witnessed steady demand driven by infrastructure development and industrial growth. The company’s leadership position within the midcap space and its ranking among the top stocks across the entire market highlight its competitive advantage and market acceptance. This sectoral strength, combined with the company’s financial discipline, enhances its appeal as a core portfolio holding.

Summary

In summary, APL Apollo Tubes Ltd’s current 'Strong Buy' rating is well justified by its excellent quality metrics, positive financial trends, fair valuation relative to growth, and supportive technical signals. As of 23 February 2026, the stock has demonstrated strong returns and operational resilience, making it an attractive option for investors seeking growth in the midcap segment of the Indian equity market.

Investors considering APL Apollo Tubes Ltd should weigh the company’s strong fundamentals and growth prospects against the premium valuation, keeping in mind the stock’s solid institutional backing and sectoral tailwinds. This comprehensive outlook supports the recommendation to consider the stock favourably within a diversified portfolio.

Disclaimer: All financial data and returns mentioned are current as of 23 February 2026 and reflect the latest available information.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →