Apar Industries' capacity utilization numbers shifted without explanation.
Conductor utilization fell from 90-95% to 80-90%, and oil utilization jumped from 65-70% to 80-90% in two months, but management offered no bridge.
What's new
- Record quarterly revenue of ₹6,591 cr, up 29.1% YoY.
- EBITDA post-forex rose 62.7% to ₹814 cr with 12.4% margin.
- Conductor order book at ₹10,190 cr, 56.8% exports; quarterly orders of ₹5,245 cr.
- Cables grew 29.5% with US data-center approvals for Meta, Microsoft, Google.
Themes from the call
Demand
Conductor volume fell 6.7% as domestic customers delayed clearances due to aluminum price volatility, but premium mix rose to 50.3%.
Margins
Consolidated EBITDA margin expanded to 12.4% from 9.8%, driven by higher realization and product mix; oil margin was unusually high due to inventory valuation but included a ₹93 cr provision.
Capital allocation
Capex for debottlenecking is underway across all three divisions, but no project-level amounts or commissioning dates were disclosed; working capital held at 45-50 days.
Guidance watch
- Cable EBITDA margin framework of 10.0%-11.0% maintained.
- Conductor clearance delays are expected to be temporary as customers resume to avoid project penalties.
- Management refused to guide on business forecasts or funding requirements due to proposed securities issuance.
Risk flags
- Conductor volume decline may persist if aluminum price volatility continues to delay clearances.
- Oil margin is volatile due to crude and gas oil price swings; historical-cost inventory gains may reverse.
- Unexplained shift in capacity utilization figures raises questions about disclosure consistency.
Key quotes
-
"This is the highest quarterly sales as well as profit number that we have achieved in the history of the company."
— Kushal Desai, Chairman and MD, prepared remarks -
"It ranges between 80-90%."
— Kushal Desai, Chairman and MD, Jul 2026 call on utilization
The brief
Apar Industries delivered a record quarter: revenue of ₹6,591 cr, EBITDA of ₹814 cr, and profit of ₹467 cr. All three divisions improved profitability even as external conditions worsened — a US-Iran war, export logistics disruption, and aluminum price volatility. The conductor division reported a 50.3% premium mix and a ₹10,190 cr order book, with two large US and European utility orders worth over ₹2,800 cr. Cables grew 29.5% on domestic demand and secured approvals from Meta, Microsoft and Google for US data-center supply. Oil revenue rose 34.7% despite a 13.7% volume drop, aided by historical-cost inventory economics — though management set aside a ₹93 cr provision after crude prices fell. The headline numbers are strong, but the call contained a troubling inconsistency. In May 2026 management said conductor utilization was 90-95% and oil utilization 65-70%. In July 2026 they said all divisions were operating at 80-90%. That implies a sharp drop in conductor utilization and a large jump in oil utilization with no explanation of whether capacity, methodology, or operating conditions changed. The shift matters because capacity disclosure underpins the growth story Apar is selling. Management also refused to provide guidance on forecasts or funding due to a proposed securities issuance. The quarter itself is credible, but the utilization puzzle and the opacity around capex and oil margin durability make it harder to take the narrative at face value.
Record profits, but a silent capacity calculation change erodes the credibility of Apar's disclosure.