🔍 Observations
Topline
- Revenue from Operations jumped 23.3% YoY (₹18,581 Cr → ₹22,902 Cr), with Q4FY26 alone clocking ₹6,603 Cr — the strongest quarter of the year, up 26.7% YoY.
- Conductors dominated at ₹12,712 Cr (55% of segment revenue), growing 32.7% YoY; Cables surged 25.8% YoY to ₹6,220 Cr — both segments accelerating meaningfully.
- Transformer & Speciality Oils grew a modest 5.6% YoY to ₹5,373 Cr, acting as the revenue drag relative to peer segments.
Bottomline
- PAT grew 18.9% YoY (₹821 Cr → ₹977 Cr); EPS rose from ₹204.47 to ₹243.21 — a clean, unlevered earnings expansion.
- Exceptional items of ₹32.53 Cr (net charge) dented reported PBT in FY26; pre-exceptional PBT grew 21.4% YoY (₹1,106 Cr → ₹1,342 Cr), a more accurate read of operating performance.
- Q4FY26 PAT of ₹253 Cr was flattish YoY (vs. ₹250 Cr in Q4FY25) despite a 27% revenue jump — margin compression at the quarterly level warrants watching.
Margins
- Segment EBIT margin (Total Segment Results / Total Segment Revenue): FY26 = ₹1,968 Cr / ₹24,501 Cr = 8.0% vs. FY25 = ₹1,634 Cr / ₹19,757 Cr = 8.3% — a 30 bps compression despite absolute profit growth.
- Net profit margin contracted slightly: FY26 = ₹977 Cr / ₹22,902 Cr = 4.27% vs. FY25 = ₹821 Cr / ₹18,581 Cr = 4.42% — scale is outrunning margin expansion.
- Unallocable expenses ballooned 60.6% YoY (₹117 Cr → ₹189 Cr), the primary margin headwind at the PBT level.
Growth Trajectory
- 3-year revenue CAGR implied from FY25→FY26 base is strong; the 23% single-year step-up on an already ₹18,581 Cr base signals Apar is capturing the T&D capex upcycle, not just riding it.
- Cables segment re-rating underway — grew from ₹4,945 Cr to ₹6,220 Cr (+25.8%) with EBIT jumping 29.5% (₹459 Cr → ₹595 Cr), margin holding near 9.6%.
- Conductor EBIT grew 21.9% YoY on 32.7% revenue growth, implying mild margin dilution — likely mix/pricing pressure as volumes scale into commodity-linked orders.
🧮 Profit & Loss Statement
🧮 Balance Sheet
🧮 Cash Flows Statement
🟢 Green Flags
- Conductors revenue up 32.7% YoY — direct beneficiary of India’s accelerating transmission infrastructure build-out; order book visibility likely strong.
- Cables EBIT up 29.5% YoY — fastest-growing segment on an absolute EBIT basis; re-rating catalyst in play as power and telecom capex converges.
- Pre-exceptional PBT up 21.4% YoY — underlying earnings power is compounding; exceptional items are non-recurring in nature.
- CWIP surged from ₹128 Cr to ₹539 Cr — aggressive capacity expansion in progress; sets the stage for next leg of revenue growth without M&A risk.
- Trade payables expanded proportionately (₹5,549 Cr → ₹6,856 Cr, +23.6% YoY) — supplier credit growing in line with business scale, not stressed payables.
- Cash balance stable at ₹669 Cr despite heavy capex (₹737 Cr) and dividends (₹205 Cr) — OCF is funding growth without equity dilution.
- EPS compounding at 18.9% YoY on a fixed share capital base of ₹40.17 Cr — no dilution drag on per-share value creation.
🔴 Red Flags
- Trade receivables up 30.8% YoY (₹4,193 Cr → ₹5,337 Cr total current + non-current) against 23.3% revenue growth — receivables outpacing sales; DSO likely elongating.
- OCF declined 25.1% YoY (₹1,291 Cr → ₹968 Cr) despite higher profits — working capital consumed ₹480 Cr incremental cash vs. prior year’s build of ₹25 Cr net.
- Inventory up 25.4% YoY (₹3,311 Cr → ₹4,153 Cr) — at ₹22,902 Cr revenue, inventory days are stretching; commodity price exposure risk on the books.
- Unallocable expenses up 60.6% YoY (₹117 Cr → ₹189 Cr) — structural cost creep at HQ level; needs disclosure on composition to assess recurrence.
- Short-term borrowings rose 2.4x (₹172 Cr → ₹408 Cr) — working capital funding gap being bridged with short-term debt; a risk if receivable collections slip.
- FCF negative: OCF ₹968 Cr minus capex ₹737 Cr = FCF of ₹231 Cr vs. FY25’s ₹782 Cr (₹1,291 Cr – ₹510 Cr) — 70% FCF compression YoY; capex cycle is consuming cash.
📊 Balance Sheet Analysis
- Leverage remains manageable: Total debt (non-current ₹433 Cr + current ₹408 Cr = ₹841 Cr) against equity of ₹5,393 Cr gives a D/E of ~0.16x — low-leverage balance sheet.
- Working capital intensity rising: Net current assets grew from ₹2,979 Cr to ₹3,466 Cr (+16.4% YoY) but receivables + inventory now constitute 84% of current assets — quality of current assets is concentrated in operating cycle items.
- Equity base strengthening: Retained earnings-driven equity growth (₹4,504 Cr → ₹5,393 Cr, +19.7% YoY) with zero dilution; CWIP of ₹539 Cr signals capital deployment is ahead, not behind.
- Liquid buffer thin relative to scale: Cash of ₹669 Cr against current liabilities of ₹7,730 Cr gives a cash-to-CL ratio of 8.6% — the company runs lean; relies on working capital lines, not cash reserves.
💰 Cash Flow Analysis
- OCF quality deteriorating: PBT-to-OCF conversion fell from 116.8% in FY25 to 73.9% in FY26 — working capital absorption (receivables +₹1,041 Cr, inventory +₹826 Cr, offset by payables +₹1,387 Cr) is the culprit.
- Capex stepped up 44.5% YoY (₹510 Cr → ₹737 Cr) — growth capex, not maintenance; CWIP tripling confirms assets under construction will add capacity in FY27-28.
- Financing outflows contained: Net long-term borrowing addition of ₹60 Cr (proceeds ₹190 Cr minus repayments ₹130 Cr); interest paid flat YoY at ₹271 Cr — disciplined debt management.
- FCF of ₹231 Cr (OCF ₹968 Cr – capex ₹737 Cr) still covered the ₹205 Cr dividend — payout is sustainable but leaves negligible buffer if OCF dips.
💡 Investment Outlook
Apar Industries is executing a high-quality volume-led growth cycle, with both Conductors and Cables compounding on the back of India’s T&D upcycle — revenue and pre-exceptional earnings confirm the thesis is intact.
The near-term concern is OCF compression driven by a ₹1,867 Cr working capital build; if receivable collections normalize in H1FY27, OCF recovery and FCF re-expansion become the primary re-rating catalyst.
Margin trajectory is the secondary watch — 30 bps segment-level compression and a 60% spike in unallocable costs need to reverse for the earnings CAGR to stay ahead of revenue growth.
At current trajectory, Apar is a capacity-constrained compounder with a 12–18 month execution window before CWIP converts to revenue — monitor DSO trends and CWIP activation quarterly.
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