Why is APL Apollo Tubes Ltd falling/rising?

Consistent Outperformance Against Benchmarks

APL Apollo Tubes has demonstrated remarkable resilience and growth compared to the broader market indices. Over the past week, the stock surged by 8.13%, while the Sensex declined marginally by 0.39%. This trend extends over longer periods, with the stock appreciating 9.29% in the last month against a 3.74% fall in the Sensex. Year-to-date, the stock has gained 7.65%, contrasting with the Sensex’s 3.95% decline. Over the last year, the company’s shares have soared 36.72%, significantly outperforming the Sensex’s 8.61% rise. Even over three and five years, the stock’s returns of 81.17% and 339.79% respectively, dwarf the benchmark’s 37.97% and 72.66% gains. This consistent outperformance underscores the company’s robust growth trajectory and investor appeal.

Strong Technical and Market Indicators

On the day in question, APL Apollo Tubes hit a new 52-week high of ₹2,087, reflecting strong buying interest. The stock outperformed its sector by 1.14%, further signalling relative strength. Notably, it has recorded gains for three consecutive days, accumulating a 9.75% return during this period. The intraday high of 4.3% above the previous close highlights bullish sentiment. Additionally, the stock is trading above all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—indicating a sustained upward trend. Investor participation has also surged, with delivery volumes on 23 Jan rising by 160.3% compared to the five-day average, suggesting increased conviction among shareholders. Liquidity remains adequate, supporting sizeable trades without significant price impact.

Robust Financial Fundamentals Driving Confidence

The company’s strong fundamentals provide a solid foundation for its share price appreciation. APL Apollo Tubes boasts an impressive average Return on Capital Employed (ROCE) of 27.96%, reflecting efficient utilisation of capital to generate profits. Its net sales have grown at an annual rate of 22.70%, while operating profit has expanded by 24.59%, signalling healthy business expansion. The company’s ability to service debt is also commendable, with a low Debt to EBITDA ratio of 0.35 times, indicating prudent financial management and low leverage risk.

Recent quarterly results further bolster investor optimism. The company reported a 42.9% growth in net profit for the quarter ended December 2025, marking the fourth consecutive quarter of positive results. Quarterly net sales reached a record ₹5,815.13 crores, while PBDIT hit a high of ₹471.79 crores. The half-year ROCE remains strong at 27.53%, underscoring sustained operational efficiency.

Valuation and Institutional Backing

APL Apollo Tubes maintains a fair valuation with a Price to Book Value of 12.4 and a Return on Equity (ROE) of 22.8%. Despite its strong performance, the stock trades at a discount relative to its peers’ historical valuations, offering an attractive entry point for investors. The company’s PEG ratio of 0.6 indicates that its price growth is reasonable compared to its earnings growth, which has surged by 80% over the past year. Institutional investors hold a significant 53.03% stake, reflecting confidence from sophisticated market participants who typically conduct thorough fundamental analysis before committing capital.

Market Recognition and Long-Term Prospects

APL Apollo Tubes is recognised among the top 1% of companies rated by MarketsMojo across a universe of 4,000 stocks. It holds the second rank among all Mid Cap stocks and across the entire market, highlighting its superior quality and growth potential. The company’s market-beating performance is evident not only in the last year but also over three years and the recent three-month period, consistently outperforming the BSE500 index. This sustained excellence in both fundamentals and market returns underpins the current bullish sentiment and rising share price.

In summary, the rise in APL Apollo Tubes Ltd’s stock price on 27-Jan is driven by a combination of strong quarterly results, robust long-term financial metrics, favourable valuation, and increased investor participation. The stock’s ability to outperform benchmarks and maintain upward momentum across multiple timeframes makes it a compelling choice for investors seeking growth in the steel products sector.

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