Why Apollo Pipes’ Stock Jumped To A Record High

Shares of Apollo Pipes Ltd. jumped to a record high after a portfolio manager raised its stake in the pipemaker.

SageOne Investment Advisors, a fund managed by Samit Vartak, has acquired a 0.54% stake or more than 70,000 shares of the company at Rs 995.1 apiece, according to data available on the exchanges. The portfolio management services, which had Rs 1,202.11-crore assets under management as of February 2021, had picked up a 1% stake in Apollo Pipes in November last year.

Among other large investors within the non-promoter group who own a stake in the company include Malabar India Fund (2.5%), Ashish Kacholia (3.58%), Malabar Value Fund (1.34%), Mukul Agrawal (3.81%) and Saket Agrawal (1.63%), according to its December-quarter shareholding pattern.

The company reported a sales volume of 12,987 tonnes in the January-March period, a rise of 34% over the year earlier, it said in its quarterly business update released on the stock exchanges. This growth, it said, was driven by contribution from across product categories, including value-added products.

Its registered sales volume rose 6% year-on-year to 47,333 tonnes in FY21.

The company anticipates further improvement in sales performance over the next few quarters on the back of a better demand environment and increase in geographical reach, combined with an uptick in utilisation levels, it said.

Apollo Pipes said its current RoCE of 25% has scope to improve as capacity utilisation increases. The company also aims to double its revenue over the next two years. It also guided for a high single-digit or low double-digit growth in agribusiness, while it expects double-digit growth for its building material business.

Shares of Apollo Pipes gained as much as 6.2% around 11:10 a.m. to Rs 1,065 apiece. The stock is trading 28.6% higher than its 12-month Bloomberg consensus price target of Rs 750 apiece.