APL Apollo Tubes shares: Five factors why the multibagger stock can hit Rs 1,490 mark

Shares of APL Apollo Tubes Ltd were trading 44% higher to their 52-week low in the current session. The stock, which fell to a 52-week low of Rs 816 on June 29, 2022 hit an intraday high of Rs 1174 on BSE today, translating into a gain of 43.87 per cent during the period. The stock closed at Rs 1135.75 in the previous session. In the current session, the stock gained 3.37% to Rs 1174 on BSE. APL Apollo Tubes stock has gained 6% this year and risen 16.32% in a year. The stock hit a 52-week high of Rs 1336.80 on February 17, 2023 and a 52-week low of Rs 816 on June 29, 2022.  It has turned into a multibagger, rising 607% in three years.

A total of 0.47 lakh shares of the firm changed hands, amounting to a turnover of Rs 5.41 crore on  BSE. The market cap of the company climbed to Rs 32,347 crore on BSE. 

Financial Services firm Motilal Oswal has maintained its buy call to the stock with a target of Rs 1490. The target amounts to an upside of 31% to the previous close of Rs 1135.75 on BSE.

The brokerage referred to APL Apollo as its top pick expecting the firm to gain a larger pie in the growing structural tube market.

The brokerage believes APL Apollo will sustain the growth momentum on the back of five factors. They are:

1) Rising demand across segments.

2) Increased product penetration with the help of a robust distribution network.

3) An increase in the share of VAP, thus driving margins.

4) The introduction of Apollo Mart.

5) The company’s leadership position.

“We project a revenue/EBITDA/PAT CAGR of 15%/35%/40% over FY23–25. We value the stock at 33x FY25E EPS to arrive at a target price of Rs 1,490. Maintain BUY,” said Motilal Oswal.

In terms of technicals, the relative strength index (RSI) of APL Apollo Tubes stands at 44.2, signaling it's trading neither in oversold nor in the overbought zone. APL Apollo Tubes stock has a one-year beta of 0.6, indicating low volatility during the period. The stock is trading higher than the 5 day, 20 day and 200 day moving averages but lower than 50 day and 100 day moving averages.

APL Apollo Tubes Limited is the largest producer of structural steel tubes in India. It has an extended distribution network of warehouses and branch offices in 29 cities across the country catering to domestic as well as 20 countries worldwide. The Delhi-based firm offers over 1,100 varieties of Pre- Galvanized Tubes, Structural Steel Tubes, Galvanized Tubes, MS Black Pipes and Hollow Sections, making APL Apollo is one of leading branded steel products manufacturers in India.  

Also read: June stock picks: SBI, Ashok Leyland, TCS, ITC among shares that analysts picked this month

Also read: Tata Motors shares: Up 41% this year, can the Tata Group stock rise further?