Apar Industries Ltd:Annual Report 2023-24 Analysis

Apar Industries Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History:

Apar Industries was established in 1958.

Headquarters Location and Global Presence:

The company is headquartered in Mumbai, India. Apar Industries has a global presence, exporting its products to various countries across the world.

Company Vision and Mission:

• Vision: To be a globally respected and admired organization, driven by innovation, customer-centricity, and sustainable practices.
• Mission: To provide high-quality products and solutions that meet the evolving needs of our customers, while creating value for our stakeholders and contributing to a greener future.

Key Milestones in Their Growth Journey:

• 1958: Establishment of Apar Industries.
• Expansion into conductor manufacturing.
• Diversification into transformer oil and specialty oils.
• Growth in polymer segment through strategic acquisition.
• Focus on innovation and R&D.

Stock Exchange Listing Details and Market Capitalization:

Apar Industries Ltd. is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Recent Financial Performance Highlights:

Recent financial reports show increasing revenues and profits, driven by strong demand across its product segments.

Management Team and Leadership Structure:

The company is led by a board of directors and a team of experienced professionals across various functions.

Notable Awards or Recognitions:

• Various awards for export performance.
• Recognition for environmental initiatives and sustainability practices.

Their Products #

Complete Product Portfolio with Categories:

Apar Industries has a diversified product portfolio across three main categories:

• Conductors:
  • Overhead Conductors (AAC, AAAC, ACSR, etc.)
  • Speciality Conductors (HTLS, etc.)
• Transformer Oil:
  • Naphthenic Based Transformer Oil
  • Paraffinic Based Transformer Oil
  • White Oil
  • Speciality Oils
• Polymers:
  • Elastomers
  • Thermoplastics
  • Compounding

Flagship or Signature Product Lines:

• Conductors: High Temperature Low Sag (HTLS) conductors
• Transformer Oil: Poweroil brand of transformer oils
• Polymers: Variety of customized compounding solution.

Key Technological Innovations or Patents:

• Development of high-performance conductors for power transmission.
• Innovation in transformer oil formulations for improved performance and lifespan.

Manufacturing Facilities and Production Capacity:

Apar Industries has multiple manufacturing facilities across India, strategically located to serve key markets. The company continuously invests in expanding its production capacity to meet growing demand.

Quality Certifications and Standards:

The company holds various quality certifications, including ISO 9001, ISO 14001, and OHSAS 18001. Its products also comply with relevant international standards.

Unique Selling Propositions or Technological Advantages:

• Customized product solutions tailored to specific customer needs.
• Focus on innovation and R&D to develop advanced products.
• Strong reputation for quality and reliability.

Recent Product Launches or R&D Initiatives:

Recent R&D initiatives have focused on developing new grades of transformer oil with improved performance characteristics and more environment-friendly polymer compounds.

Primary Customers #

Target Industries and Sectors:

• Power Transmission and Distribution
• Electrical Equipment Manufacturing
• Automotive
• Telecommunications
• Infrastructure
• Renewable energy

Geographic Markets (Domestic vs. International):

Apar Industries serves both domestic and international markets. The company has a strong presence in India and exports its products to Asia, Africa, Europe, the Middle East, and the Americas.

Major Client Segments (agricultural, industrial, residential, etc.):

• Power utilities
• EPC contractors
• Transformer manufacturers
• Cable manufacturers
• Automotive OEMs
• Industrial companies

Distribution Network and Sales Channels:

Apar Industries utilizes a combination of direct sales, distributors, and channel partners to reach its customers.

Major Competitors #

Direct Competitors in India and Globally:

• Conductors: Hindalco, Sterlite Power, Universal Cables
• Transformer Oil: Savita Oil Technologies, Gandhar Oil Refinery India Ltd.
• Polymers: Reliance Industries, BASF, SABIC

Competitive Advantages and Disadvantages:

• Advantages: Diversified product portfolio, strong brand reputation, focus on innovation.
• Disadvantages: Intense competition, exposure to commodity price fluctuations.

How they differentiate from competitors:

Apar Industries differentiates itself through its focus on providing customized solutions, investing in R&D, and maintaining high-quality standards.

Industry Challenges and Opportunities:

• Challenges: Rising raw material prices, increasing competition, and evolving regulatory landscape.
• Opportunities: Growing demand for power infrastructure, increasing adoption of renewable energy, and expanding application of polymers.

Market Positioning Strategy:

Apar Industries positions itself as a leading provider of high-quality products and solutions for the power, automotive, and other industrial sectors.

Future Outlook #

Expansion Plans or Growth Strategy:

Apar Industries plans to expand its production capacity, strengthen its distribution network, and enter new markets. The company also aims to increase its focus on R&D and innovation to develop new products and solutions.

Upcoming Products or Innovations:

• Development of advanced conductor technologies.
• Expansion of the range of environment-friendly transformer oils.
• Introduction of new polymer compounds for various applications.

Sustainability Initiatives or ESG Commitments:

Apar Industries is committed to sustainability and has implemented various initiatives to reduce its environmental impact. The company has also invested in renewable energy projects.

Industry Trends Affecting Their Business:

• Increasing demand for power infrastructure
• Growing adoption of renewable energy
• Rising demand for electric vehicles
• Focus on sustainability and environmental regulations

Long-term Vision and Strategic Goals:

Apar Industries aims to be a globally respected and admired organization, driven by innovation, customer-centricity, and sustainable practices. The company is committed to creating value for its stakeholders and contributing to a greener future.

Financial Performance Overview (FY2021-2024) #

3-Year Trend Analysis of Key Financial Metrics #

• Revenue Growth: Consolidated revenue experienced a 13% growth in FY24, reaching ₹16,153 crore, up from ₹14,336 crore in FY23 and ₹9,317 crore in FY22.
• EBITDA: EBITDA (post open period forex) increased by 24% in FY24 to ₹1,632 crore, compared to ₹1,320 crore in FY23 and ₹632 crore in FY22.
• Profit After Tax (PAT): PAT saw a 29% increase, totaling ₹825 crore in FY24, up from ₹638 crore in FY23.
• Return on Equity (ROE): ROE was 27% in FY24 with above 20% level on large capital inflow, compared to 32.28% in FY23.
• Exports Revenue: The company’s export revenue grew 4.32% YoY, and made up 45.2% of total revenues.
• Market Capitalization: The market capitalization was up 192.95% YoY.

Business Segment Performance #

• Conductors: Revenue of ₹8,031 crore (FY24), marking a 15% growth. The domestic-export ratio was 45:55, with premium products contributing 45% to the segment’s revenue. EBITDA contribution was 53.37%.
• Specialty Oils: FY24 revenue was up by 4%. Global transformer oil volumes are up 15%. 49% of revenue was exported. EBITDA contribution was 18.97%.
• Cables: Demonstrated an 18% revenue growth. It is the fastest-growing segment of cables and wires. EBITDA contribution was 26.86%. It represents 22.90% of revenue.
• Retail Expansion: In FY24, a distribution network with 339 distributors across 18 states in India, and 5800+ retailers was established.

Major Strategic Initiatives #

• Capital Expenditure: ₹330.67 crore was spent in FY24 on capacity expansion, productivity improvements, cost reduction, ESG initiatives, and R&D.
• Qualified Institutions Placement (QIP): ₹1,000 crore was successfully raised through QIP, deployed towards the company’s working capital requirements.
• Renewables Focus: Investments and developments in sunrise sectors like solar and wind cables, MVCC conductors, and eco-friendly transformer oils.
• Manufacturing Expansion: Alloy / HEC / HTLS manufacturing capacity was de-bottlenecked from 3120 km per month to 5722 km per month and two new plants were acquired / commissioned.
• Industry 4.0 Technologies: Adoption of IoT and smart factory solutions to modernize manufacturing processes.
• Digitalization: Digitization of HR processes and launch of retailer and electrician loyalty apps (APAR POWER and APAR E-Power) to enhance operational efficiency and stakeholder engagement.
• Telecom Services: The Group has ventured into the telecom services sector, with the plan to create digital networks and increase network coverage across the country.

Risk Landscape #

• Geopolitical Instability: Ongoing geopolitical instability may increase commodity and freight prices.
• Commodity Price Volatility: Exposure to fluctuations in raw material costs, especially aluminum and copper. The company uses hedging strategies to mitigate this risk.
• Interest Rate Risk: Exposure to fluctuations in interest rates, managed through a mix of fixed and floating-rate instruments.
• Cybersecurity Risks.
• Climate Change: Increasing frequency and intensity of cyclones and extreme weather events.
• Supplier Concentration.

ESG Initiatives and Metrics #

Environmental #

• Increased renewable energy consumption from 4% in FY23 to 7.3% in FY24.
• 4% reduction in energy intensity in cable and conductor manufacturing.
• 13% reduction in water consumption intensity.
• 4.84% decrease in Scope 1 and Scope 2 emission intensity.
• ‘Carbon Disclosure Project’ (CDP) awarded the company a ‘B’ score in 2023.
• Development of Environmental Product Declarations (EPDs) for Grade 8176, Grade 1350 & Grade 6201 Wire rods and AL59 Conductor.
• Implemented 13 awareness programs for the value chain partners.

Social #

• Great Place to Work (GPTW) certification from February 2024 to 2025.
• Silver Medal from EcoVadis in 2023, placing in the 79th percentile.
• Improved gender diversity from 8.26% in FY23 to 9.27% in FY24.
• Implementation of holistic wellness benefits, educational assistance, and updated leave policies.
• CSR initiatives focused on healthcare, education, and rural development.
• Establishment of the Govardhan Skill Centre (GSC), which has impacted the lives of residents and provided vocational training to tribal students.

Governance #

• Three-tiered Governance Architecture for sustainability.
• Established a dedicated board-level Corporate Social Responsibility and Sustainability (CSR & S) Committee.
• Implementation of stringent compliance measures and ethical decision-making processes.

Management Outlook #

• Optimistic about sustaining growth due to the global energy transition and increased electrification, particularly in India and international markets.
• Continued focus on high-margin products, leveraging production capacity, and expanding exports.
• Ongoing investments in manufacturing excellence, adopting Industry 4.0 technologies, and enhancing operational efficiencies.
• Plans to consolidate on the export business.
• Aims to be seen as a global brand.
• Will continue to focus on premium products.
• Retail network is expected to grow.

Detailed Analysis #

Financial Analysis of APAR Industries Limited #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

Significant Changes in Major Line Items (>10% YoY) #

FY24 vs FY23: #

• Non-current investments: Increased by 76.55%, driven by new investments.
• Other non-current assets: Decreased significantly by 43.45%
• Other equity: Increased by 89.83%, mainly due to the issuance of shares through Qualified Institutional Placement.
• Non-current borrowings: increased by 32.1%.
• Current investments Significant Decrease because shift of investments from current to non-current.
• Deferred tax liabilities Decreased by 91,53%

Working Capital Trends #

FY24 vs FY23: #

• Current assets saw a marginal increase.
• Current liabilities also increased, relatively stable.
• The changes in the sub-components should be analyzed for the exact reason.

Asset Quality Metrics #

• Inventory: The level of inventory has increased.
• Trade Receivables: Total trade receivables increased by 13.56%.
• Impairment loss allowances are present.

Debt Structure and Maturity Profile #

• Borrowings: Increased by 32.1% on Non-current side and by 47.54% on current side.
• The maturity profile is not fully available.

Off-Balance Sheet Items #

• Contingent Liabilities: Disclosed, mainly comprising claims, disputes, and guarantees.
• Capital Commitments: ₹330.67 crore in FY24, up from ₹247.83 crore in FY23.

Operating Performance #

Revenue Breakdown by Segment/Geography with Growth Rates #

• Conductors: FY24 revenue was ₹8,031 crore, a 15% growth YoY. The domestic-export ratio was 45:55, with premium products accounting for 45% of the segment’s revenue.
• Specialty Oils: FY24 revenue was ₹4,626 crore, a 4% increase, and the share of Transformer Oils sold to overseas markets grew up to 49%.
• Cables: FY24 revenue reached ₹3,859 crore, an 18% growth YoY, Retail wires within the segment had a 58% growth.
• Consolidated: FY24 total revenue was ₹16,153 crore, up 13% YoY. Export revenue constituted 45.2% of total revenue in FY24. Exports increased by 4.32%.

Geographical Breakdown (FY24) #

• Domestic: 54.8% of total revenue.
• Exports: 45.2%.

Cost Structure Analysis #

• Cost of Materials Consumed: Constituted a major expense, totaling ₹11,634.61 crore in FY24, showing a year on year growth.
• Employee benefit expenses: FY24 were up to ₹289 crore.
• Other Expenses: Significant other expenses included storage charges, power, electricity and fuel, processing charges, freight and forwarding.
• CAPEX: Investments of the last 4 financial years of ₹764.10 crores on adding capabilities, improving productivity, reducing cost, ESG, R&D and adding capacity to manufacture, test and install high-value added products and on adding capacity.
• R&D: ₹19.47 crore.

Margin Analysis (Gross, Operating, Net) #

• EBITDA Margin (Post open period forex): Increased by 90 bps to 10.1% in FY24.
• Net Profit Margin: Increased from 4.45% in FY23 to 5.11% in FY24.
• Conductors: Main profit driver in FY24, contributing 53.37% of total EBITDA (post open period forex). EBITDA margin down by 4%.
• Specialty Oils and Lubricants: Contributed 18.97% to total EBITDA (post open period forex) in FY24.
• Cables: Contributed 26.86% to total EBITDA (post open period forex) in FY24, with an 11.40% EBITDA margin.

EPS Analysis (Basic/Diluted) #

• FY24: Basic and Diluted EPS were both ₹211.63.
• FY23: Basic and Diluted EPS were both ₹166.64.
• Growth: Substantial increase of more than 27% was noted on EPS.

Cash Management: A Financial Analysis #

Cash Flow and Liquidity Analysis #

Detailed OCF, ICF, FCF Components (Consolidated, in Crores of INR) #

• OCF (Operating Cash Flow):
  • FY24: Calculated as Profit before tax (1,106.46) + Depreciation (115.71) + Finance Costs (38.16) - interest income on Investments (8.77) = 1,251.56, then adjusted for working capital changes and tax, resulted in a net OCF of -28.45.
  • FY23: Calculated as Profit before tax (864.48) + Depreciation (98.34) + Finance Costs (30.64) - interest income on Investments (4.46) = 1,009, then adjusted for working capital changes and tax, resulted in a net OCF of 677.38.
• ICF (Investing Cash Flow):
  • FY24: Acquisition of property, plant, and equipment (-330.67), Sale of property, plant, and equipment (3.56), Sale / (purchase) of investment in subsidiary & associate ( -4.21), Sale/(purchase) of investment other than investment in subisidary & associate -net(54.30), Interest received on investment(11.12) resulted in a net ICF of -265.90.
  • FY23: Acquisition of property, plant, and equipment (-247.83), Sale of property, plant, and equipment (1.13), Sale / (purchase) of investment in subsidiary & associate (-3.80), Sale/(purchase) of investment other than investment in subisidary & associate -net(-84.45), Interest received on investments (4.46), resulting in a net ICF of -326.49.
• FCF (Free Cash Flow): Not directly calculable from the provided data, as it requires subtracting capital expenditures from OCF. However, both OCF and ICF components are detailed above.

Working Capital Management Efficiency #

• FY24:Debtors Turn over Ratio increased to 5.0, Inventory turn over Ratio to 4.6 and Trade payables Turn over ratio to 4.8.
• FY23: Debtors Turn over Ratio was 6.0, Inventory turn over Ratio was 4.7 and Trade payables Turn over ratio was 3.3.

Capex Analysis by Segment #

• FY24:
  • Conductors: INR 137 crore spent on capabilities, productivity, cost reduction, ESG, R&D, and capacity expansion.
  • Cables: Commissioned 1 new CCV lines and 4 Electron Beam accelerators.
  • Fils: Expansion of manufacturing capacity at Al-Hamariyah plant, with a doubling of blending and automated packing capacity.
  • Polymers: Production capacity increased from 5000 MT to 35000 MT per month.
• FY23 :
  • CAPEX investments over last 4 years amounts to INR 764.10 Crores.

Dividend and Share Buyback Trends #

• Dividend: A dividend of INR 51 per share was declared in both FY 24 (192.95% increase from last year) and FY23.
• Share Buyback: No share buyback information is present in the provided data.

Liquidity Position #

• Current Ratio:
  • FY24: 2.2
  • FY23: 2.0

Key Performance Indicators #

Profitability Ratios (3-Year Trends) #

Liquidity Metrics #

Analysis: The current ratio presented is slightly up.

Efficiency Ratios #

Analysis: All ratios are slightly down.

Leverage Metrics #

The debt-to-equity ratio has been continuously reduced.

Working Capital Ratios #

Analysis: Receivables turnover has slightly gone down and the inventory turnover is maintained. Payables turnover is slightly better.

Business Segment Performance Analysis #

Revenue and Profitability Metrics with Growth Rates #

• Conductors: FY24 revenue was ₹8,031 crore, a 15% growth year-over-year (YoY). EBITDA (post open period forex) was ₹871 crore, representing 53.37% of the company’s total.
• Cable Solutions: FY24 revenue was ₹3,699 crore, growth of 18%. The segment achieved an EBITDA of ₹438 crore (26.86% of total and up by 26.86% YOY.)
• Specialty Oils: FY24 revenue was ₹4,636 crore, 4% growth. EBITDA (post open period forex) was ₹309 crore (18.97% of total).

Market Share and Competitive Position #

• Conductors: World’s largest manufacturer of conductors, dominating the Indian high-efficiency conductor (AL-59) market.
• Cable Solutions: 6th largest player in the Indian organized cables & wires market, with an 8% market share. A leader in renewable energy cables.
• Telecom Solutions: The only Indian company providing end-to-end solutions in copper and fibre hybrid cables.
• Specialty Oils: India’s largest private manufacturer and exporter of specialty oils. World’s 3rd largest transformer oil manufacturer with almost 60% market share in the power transformer segment and 40% in the distribution segment in India.
• Lubricants: Top 6 industrial lubricant marketers in India.
• Polymers: Top 3 TPE manufacturers in India.

Key Products/Services Performance #

• Conductors: Strong performance driven by high-efficiency conductors (HEC), HTLS conductors, and various copper products. New products include speciality copper conductors for high-speed railways, 96 Fibre optical ground wire (OPGW), and various CTCs.
• Cable Solutions: Focus on sunrise sectors like solar and wind cables, MVCC conductors, and light-duty cables. A pioneer in E-beam technology for house wiring.
• Telecom Solutions: Strong position in Optical fibre cables, including specialized cables for defence. Development of branded ‘Giga-Volt’ hybrid cable for 5G, Wi-Fi, and IoT applications.
• Specialty Oils: Transformer oils command a significant market share. The introduction of high-performance synthetic ester transformer oil, expanding capacity. Growth driven by strong demand.
• Lubricants: Strong supplier to tractor OEMs. Over 150 grades in the lubricant portfolio.
• Polymers: Growing international presence, and new customer acquisitions in the toy manufacturing segment.

Geographic Distribution and Market Penetration #

• Overall: 45.2% of the company’s revenue is from exports, with a presence in over 140 countries.
• Conductors: 55% of revenue is from Exports. Served customers across more than a 100 countries.
• Cable Solutions: Strong export presence, with the USA being the largest market. The Company has expanded its market to new countries such as Bahrain, Costa Rica, Mali, Burundi, and Papua New Guinea. Operates across 18 states in India, with 339 distributors, 5800+ active retailers, and over 1 lakh electricians.
• Telecom Solutions: Products being UL & CPR certified for markets in USA, Europe, and MEA.
• Specialty Oils: T-Oil sold to overseas markets. Significant market share in India. Global spread of operation and customers.
• Polymers: Expanded international reach to South Asia, Gulf countries, Algeria, Oman, Dubai, and Australia.
• Specialty Automotives: Established widespread distribution network in India.

Segment-wise CAPEX and ROIC #

• Conductors: Capital expenditure of 137 crore was spent in 2024 for capabilities improvement. De-bottlenecked the capacity for manufacturing Alloys / HEC / HTLS.
• Cable Solutions: Capital expenditure includes commissioning of new E-beam line, new CCV line for HT and rubber cables.
• Specialty Oils: Expansion of manufacturing capacity in Al-Hamariyah and doubling industrial and automotive blending, and automated packing capacity.
• Polymers: Increased production capacity from 5000 MT per month to 35000 MT per month.
• Overall: Total capital expenditure incurred was Rs crores in FY24. ROIC is not available by segment, but company-wide ROE was %.

Operational Efficiency Metrics #

• Energy Intensity: A 4% reduction in energy intensity was achieved in cable and conductor manufacturing processes.
• Water Consumption: Absolute Water Consumption Reduced from 385,974 KL to 376,139 KL. Water intensity reduced by over 13%.
• Emission Intensity: Scope-1 and Scope-2 emission intensity reduced by 4.84%

Growth Initiatives and Challenges #

• Growth Initiatives:
  • Focus on premiumization and globalization across all segments.
  • Continued investment in R&D and digitalization to drive innovation.
  • Expansion in the renewable energy sector with specialized cables and conductors.
  • Expansion in exports.
  • Focus on ESG and sustainability initiatives to align with global trends.
• Challenges:
  • Ongoing geopolitical instability potentially leading to higher commodity and freight prices.
  • Increased cost of capital due to inflation, which could affect export demand.
  • Volatility in raw material costs (aluminum, copper, steel, base oils) that impacts profitability.
  • Competition in the power cable market and potential delays in customer payments.
  • The cyclical nature of the power business and the energy transition.

ESG Framework #

Environmental Metrics and Targets #

• Conductors: A 4% reduction in energy intensity was achieved in conductor manufacturing processes, decreasing from 0.56 MWH/MT to 0.54 MWH/MT. Scope-1 and Scope-2 emission intensity decreased by 4.84%, from 0.289 tCO2e/ MT to 0.275 tCO2e/ MT.
• Cables: Scope-1 and Scope-2 emission intensity decreased by 4.84%.
• Renewable Energy: Renewable energy consumption increased from 4% in FY 2022-23 to 7.3% in FY 2023-24. Two wind-solar hybrid projects are being commissioned to increase renewable energy consumption by June 2025.
• Water Consumption: Absolute water consumption decreased from 385,974 KL in FY 2022-23 to 376,139 KL in FY 2023-24. Water intensity reduced by over 13%, from 26.89 KL/ Rs. Cr. turnover to 23.29 KL/ Rs. Cr. turnover. Initiatives include process improvement, recycling through sewage and effluent treatment plants (STP and ETP), and rainwater harvesting (RWH).
• Emissions: Scope 1 are direct GHG emmissions and Scope 2 are indirect GHG emmissions.
• Speciality Oils: Development of high-performance Synthetic Ester Transformer Oil.
• Overall: APAR received a ‘B’ score from the Carbon Disclosure Project (CDP) in 2023 for environmental initiatives.

Social Responsibility Programs #

• Education: Dharmsinh Desai University (DDU) received a ₹4.15 crore allocation for solar panel installation. Govardhan Skill Centre (GSC) received ₹63 lakhs to strengthen youth programs. GSC trained and placed 650 tribal students, with 40 recruited at APAR’s Khatalwada plant. Vocational training was provided to 50 tribal students. Skill development training was provided to more than 3000 students.
• Healthcare: Dr. N. D. Desai Faculty of Medical Science & Research provides free medical treatment. The Disha Patel Dialysis Centre was inaugurated and is expanding. The Dharmsinh Desai Memorial Methodist (DDMM) Heart Institute received a ₹70 lakh donation for solar panel installation. Key services included: Free cardiac consultations, ECHOs, catheterizations, and surgeries.
• Employee Benefits: Group mediclaim coverage and educational assistance were increased. Holistic wellness benefits, including mental health counselling and updated leave policies, were implemented.
• Diversity: Gender diversity improved from 8.26% in FY 2022-23 to 9.27% in FY 23-24. A new crèche facility was established in Chembur, Mumbai.
• Training: Over 500 employees completed Lean Six Sigma (LSS) training and implemented over 1200 Kaizen initiatives.
• CSR Focus Areas: The Dharmsinh Desai Methodist Memorial Hospital (DDMM), Mobile Medical Unit (MMU), Education including the Dharmsinh Desai University (DDU) , Dr. N. D. Desai Faculty of Medical Science and Research and, Govardhan Skill Center (GSC), Sister Nivedita School on Wheels, Touching live of communities near manufacturing facilities, and Adruta Children Home.

Governance Structure and Effectiveness #

• Governance Architecture: A three-tiered structure, including Sustainability Champions, a Sustainability Steering Committee, and the Board of Directors, oversees sustainability initiatives.
• Board Oversight: The Board provides strategic guidance and oversight, setting targets and reviewing progress. A dedicated Corporate Social Responsibility and Sustainability (CSR & S) Committee reviews goals, assesses risks, sets targets, and monitors performance.
• Training: APAR’s Chairman and Managing Director completed a course on ‘Business and Climate Change: Towards Net Zero Emissions’ from the Cambridge Institute for Sustainability Leadership (CISL).
• Compliance: Compliance measures and ethical decision-making are integrated into the governance framework.
• Board Committees: Include Audit, Corporate Social Responsibility & Sustainability, Nomination and Compensation-cum-Remuneration, Share Transfer & Shareholders Grievance-cum-Stakeholders Relationship, and Risk Management Committees.

Sustainability Investments and ROI #

• CAPEX Investments: ₹764.10 crore invested over the last 4 years in expanding capabilities across 10 manufacturing facilities.
• QIP: The company raised ₹1000 crore through Qualified Institutional Placement (QIP), with ₹982.58 crore deployed towards working capital requirements.
• DDU Solar Panels: ₹4.15 crore allocated for solar panel installation at Dharmsinh Desai University.
• DDMM Heart Institute: 70 Lakh donated to install solar panels.
• Financial Performance: Revenue grew by 13% to ₹16,153 crore, EBITDA (post open period forex) increased by 24% to ₹1,632 crore, and profit after tax increased by 29% to ₹825 crore.

ESG Ratings and Peer Comparison #

• CDP Rating: APAR received a ‘B’ score in 2023 from the Carbon Disclosure Project for environmental initiatives.
• EcoVadis Rating: APAR earned a Silver Medal from EcoVadis in 2023, placing in the 79th percentile.
• Great Place to Work: Great Place to Work Certification from February 2024-2025.

Regulatory Compliance and Future Preparations #

• Compliance: The company adheres to stringent global standards and certifications, including ISO 9001, ISO 14001, and OHSAS 18001.
• Emissions Reporting: Scope-1 and Scope-2 emissions were assessed by an independent third-party agency, M/S DNV Business Assurance India Private Limited, during FY 22-23 and FY 23-24.
• Future Preparedness: The company is aligning its goals with national and global priorities, focusing on renewable energy, and reducing emissions.

Financial Outlook and Segment Analysis #

Conductors #

Management Guidance and Assumptions #

• Focus on high-margin products.
• Leveraging a large production capacity of 210,000 MT for cost competitiveness.

Market Growth Forecasts #

• Global electricity transmission and distribution (T&D) industry is projected to grow.
• Favorable market conditions, with a design, manufacture, supply, and turnkey service model.

Planned Strategic Initiatives #

• Shifting from conventional conductors to high-efficiency conductors.
• Launching new products for high-speed railways, optical ground wire (OPGW), and new product lines.

Capital Expenditure Plans #

• ₹137 crore CAPEX spent on capabilities, productivity, cost reduction, ESG, R&D, and high-value product manufacturing.
• Acquired two new plants for restructuring and expansion.

Efficiency Improvement Targets #

• Debottlenecked capacity for manufacturing Alloys / HEC / HTLS increased from ~3120 km/month to 5722 km/month.

Potential Challenges and Opportunities #

• Geopolitical instability and increased capital costs due to inflation.
• Strong domestic demand in premium segments.
• Volatility in raw material costs (mitigated through hedging).

Scenario Analysis and Sensitivity #

• Shift towards premium products and export markets resulted in an increase in EBITDA.
• Sensitivity analysis for financial assets and liabilities noted, but not applied to revenue or profitability.

Cable Solutions #

Management Guidance and Assumptions #

• Focus on product innovation, quality, and sustainability.

Market Growth Forecasts #

• Substantial growth in the global electric vehicle (EV) market; APAR positioned as a leader.
• Strong growth expected in the Indian renewable energy sector.

Planned Strategic Initiatives #

• Expansion into new export markets (Bahrain, Costa Rica, Mali, Burundi, Papua New Guinea).
• Focus on the renewable energy sector in the USA.
• CPR approvals for Euro class categories, opening up the UK market.

Capital Expenditure Plans #

• Commissioned a new E-beam line and a new CCV line for HT and rubber cables.
• Implementing Industry 4.0 practices and upgraded to a SMART factory.

Efficiency Improvement Targets #

• Achieved a 5.73% reduction in greenhouse gas intensity while increasing production by 17.64% year-on-year.

Potential Challenges and Opportunities #

• Pricing pressure in the power cable market.
• Dependency on financial arrangements by key customers in the renewable energy sector and EPC contractors.
• Slowdown in the US market impacted export business.

Scenario Analysis and Sensitivity #

• EBITDA margin increased by 27.0% YoY indicating strong profitability.
• Sensitivity to price volatility not mentioned.

Telecom Solutions #

Management Guidance and Assumptions #

• Aim to provide comprehensive fiber optic cable solutions and expand into Telecom services.

Market Growth Forecasts #

• Global telecommunications market is expected to grow.
• Expanding Indian telecom market, driven by government digital inclusion efforts.

Planned Strategic Initiatives #

• Expansion into Telecom services, digital networks, and passive infrastructure (rural and defense connectivity).
• New products developed are UL & CPR certified, enabling expansion in the USA, Europe, and MEA markets.

Efficiency Improvement Targets #

• Streamlining the product range, focusing on value-added solutions like connectorized products.

Potential Challenges and Opportunities #

• Low or no ordering by major telecom firms may influence performance in optical fiber lines.

Scenario Analysis and Sensitivity #

• Sensitivity analysis to market conditions or customer behavior not specified.

Specialty Oils #

Management Guidance and Assumptions #

• Focus on designing and manufacturing products in India and the UAE for global markets.

Market Growth Forecasts #

• Increased global demand for energy and electricity is boosting the need for transformer oils.

Planned Strategic Initiatives #

• Increased capacity and geographic expansion of transformer oil production.
• Development of high-performance Synthetic Ester Transformer Oil.

Capital Expenditure Plans #

• Planned expansion of manufacturing capacity in Al-Hamriyah, UAE.
• Doubling of Industrial & Automotive blending and automated packing capacity.

Efficiency Improvement Targets #

• Record production at the Rabale plant.
• Improved proximity to customers in the Middle East & East Africa.

Potential Challenges and Opportunities #

• Geopolitical instability could increase commodity and freight prices.
• Volatility in raw material prices and increased cost of borrowing.

Scenario Analysis and Sensitivity #

• Global transformer oil volumes are up 15% vs. FY22-23.

Specialty Automotive #

Management Guidance and Assumptions #

• ARKOS focuses on innovation and affordability in the automotive aftermarket in India.

Market Growth Forecasts #

• The automotive aftermarket in India is expanding.

Planned Strategic Initiatives #

• Introduction of 3-wheeler automotive batteries.
• Development of a warranty portal for business customers.
• Expansion into the 2-wheeler tire segment for larger bikes.

Efficiency Improvement Targets #

• Enhanced warranty experience at an SKU level through a new Warranty Portal Analytics.

Potential Challenges and Opportunities #

• Establishing a strong brand presence in the competitive Indian automotive aftermarket.

Scenario Analysis and Sensitivity #

• Insufficient information to assess the impact.

Industrial & Automotive Lubricants #

Management Guidance and Assumptions #

• APAR is among the top six industrial lubricant marketers in India.
• Aims to develop environmentally friendly lubricant ranges.

Market Growth Forecasts #

• Growth is driven by the expansion of CNG fueling infrastructure and BS-VI emission standards.

Planned Strategic Initiatives #

• Expansion of metalworking range.
• Introduction of 3PL services for OEM/Private labels.
• Development of alternative base oil technologies.

Capital Expenditure Plans #

• Doubling of Industrial & Automotive blending and automated packing capacity.

Efficiency Improvement Targets #

• Development of lubricants that lower emissions and meet stringent BS-VI standards.

Potential Challenges and Opportunities #

• Exploring alternative base oil technologies like synthetic and bio-based options.

Scenario Analysis and Sensitivity #

• APAR commands 50% market share in the CNG fueling infrastructure segment.

Polymers #

Management Guidance and Assumptions #

• APAR Polymers aims for global market expansion.
• Significant market share achieved in the TPE space.

Market Growth Forecasts #

• Increasing global market acceptance and demand, with new customers in the toy manufacturing segment.

Planned Strategic Initiatives #

• Expansion into new international geographies.
• Horizontal integration with new customers in toy manufacturing.

Capital Expenditure Plans #

• Increased production capacity from 5,000 MT/month to 35,000 MT/month across all product categories.

Efficiency Improvement Targets #

• Introduction of new product lines such as PVC Compound, PP Compound, Engineering Compound, and Cable compound.

Potential Challenges and Opportunities #

• Leveraging IATF certification to boost growth and client confidence.
• Developing bio-based TPE compounds to reduce carbon footprint.

Scenario Analysis and Sensitivity #

• No sensitivity analysis specified.

Audit and Compliance Analysis #

Auditor’s Opinion and Qualifications #

• The Statutory Auditors, M/s. C N K & Associates LLP, have issued an unmodified opinion on the standalone and consolidated financial statements.
• The audit reports do not contain any qualifications, reservations, or adverse remarks.

Key Accounting Policies and Changes #

• The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under Section 133 of the Companies Act, 2013.
• Historical cost convention is used, except for certain financial assets and liabilities that are measured at fair value.

Internal Control Effectiveness #

• The Company has an adequate internal financial controls system commensurate with its size and the nature of its business.
• The auditors, in their report, have stated that the internal financial controls over financial reporting were operating effectively.

Regulatory Compliance Status #

• The Company has complied with the applicable provisions of the Companies Act, 2013, and SEBI Listing Regulations.
• The Company paid listing fees to BSE and NSE on time.
• The Company is not a declared wilful defaulter.
• The Company has implemented a Whistle Blower Policy.
• The Company obtained the Great Place to Work Certification.
• There has been a significant reduction of over 13% in water intensity.
• Absolute water consumption reduced from 385,974 KL in FY 2022-23 to 376,139 KL in FY 2023-24.

Legal Proceedings and Potential Impact #

• There are no significant and material orders passed by regulators, courts, or tribunals impacting the going concern status and future operations.
• There is pending litigation.

Related Party Transactions #

• All related-party transactions were on an arm’s length basis and in the ordinary course of business.
• No materially significant related-party transactions with potential conflicts of interest were noted.
• A Related Party Transactions policy is in place and available on the Company’s website.
• Details of related party transactions are included in Note 49 of the standalone financial statements and in Form AOC-1 and Form AOC-2.

Subsequent Events #

• The Board has recommended a final dividend of ₹ 51 per share.
• An unspent amount of ₹ 0.05 crores related to CSR activities from prior periods has been transferred to a special account in compliance with section 135(6) of the Act.

Analysis of Accounting Quality #

• The financial statements are prepared in accordance with Ind AS.
• There are no qualifications or adverse remarks in the auditors’ report.
• The use of the historical cost convention, with exceptions for certain financial instruments, is a standard practice.
• The Company has detailed policies and procedures for key financial processes, including risk management, internal controls, and compliance.
• The company reported 13% revenue growth during the year under review and a 29% per cent increase in PAT.
• EBITDA margin strengthened 90 bps to 10.1%.
• Return on equity was sustained above 10% level i.e. 17% in FY24 despite a large capital inflow during the year that will translate into earnings in the foreseeable future.

Regulatory Risk Assessment #

• The Company is subject to various laws and regulations, including the Companies Act, SEBI regulations, and other industry-specific guidelines.
• The Company has not faced any penalties or strictures from regulatory authorities during the past three years.
• The Company is subject to environmental regulations and has taken steps to reduce emissions and water consumption.
• The Company has various ESG policies in place covering employees, customers, suppliers and the environment.