Shares of Apar Industries hit a new high of Rs 1,864, up 5% in intraday trade on the BSE on Thursday, in an otherwise subdued market amid a positive outlook. It traded 4% higher at Rs 1,835 at 12:27 pm, while the S&P BSE Sensex fell 0.55%.

Shares of the world’s largest conductor maker, the third-largest maker of transformer oil and India’s largest maker of renewable cables have soared 98% in the past six months. In comparison, the S&P BSE Sensex gained 14%. Moreover, it has soared 145% over the past year compared to the benchmark index’s 0.24% gain.

In the first half (April-September) of the 2022-23 financial year (H1FY23), Apar Industries reported an 89% year-on-year rise in its after-tax profit to Rs 2.25 billion. Revenue in the first half of FY23 rose 55% year-on-year to Rs 6,328 crore, with growth in all three business segments driven by higher volumes, higher commodity prices and increased exported cables.

Ebitda rose 77% year-on-year to Rs 4.76 billion due to higher margins on traditional premium conductors, higher cable sales, higher oil prices and higher inventories. In 1H FY23, the EBITDA margin improved 90 bps YoY to 7.5%.

According to management, the current geopolitical, macro environment and level of infrastructure spending are providing the company with a better platform. In addition, the world is vigorously promoting the development of renewable energy. “We remain optimistic about the opportunity. The company’s growth momentum remains strong,” management said.

Concurrently, on December 6, 2022, Care Ratings revised its outlook on Apar Industries’ long-term debt instruments to “positive” from “stable” while reaffirming the CARE A/CARE A1 ratings.

“Outlook revisions factor in improving business risk conditions over the medium term. Total operating income (TOI) rose 46.1% year-over-year, with domestic revenue up 54% and export revenue up 35%, representing a percentage of 38% TOI,” Care Ratings said in its rating stated in the reason.

The ratings continue to consider the company’s solid dominance in conductors, transformers and speciality oils (TSO), diversified revenue streams, promoters’ extensive industry knowledge, ability to increase product offerings and improvement in overall performance, it said, through increased volume and value.

The revision to the outlook reflects an expected improvement in the business’s risk profile over the medium term, with higher turnover and a healthy margin of 6.5-7%, supported by healthy demand and a healthy order book. The financial risk profile is expected to remain at 2-2.3x overall gearing, including a letter of credit acceptance. The rating agency’s outlook could be revised to “stable” due to a significant decline in revenue and PBILDT margins, or a deterioration in the capital structure due to higher debt levels or lower cash accruals, the rating agency added.