On Thursday, shares of Apollo Pipe (APL) rose 6% in sluggish intraday trade to hit a fresh high of Rs 718.70 on the BSE, citing a healthy business outlook. In contrast, the S&P BSE Sensex was down 0.17% at 63,038 at 2:40 pm.

So far, in the current calendar year 2023, the stock has risen 42%, compared with a 3% gain for the S&P BSE Sensex.

APL manufactures pressure pipes (PVC, ring pipes and self-assembling pipes), column pipes, casings, pipes, soil-wastewater-stormwater pipes, fittings and tanks.

The Indian PVC pipes and fittings market is expected to register a CAGR of 15% during FY2022-FY26, APL said. The major growth drivers are the government’s push for cleanliness and sanitation to boost the water resources management sector, increasing construction of affordable housing and growing demand for housing and irrigation and water supply infrastructure.

Meanwhile, APL posted 17% revenue growth in FY2023, driven by volume growth of 24%, but a year-on-year decline due to lower polyvinyl chloride (PVC) resin prices.

The sharp correction in PVC resin prices led to inventory losses in the second and third quarters of FY23, impacting profitability. As a result, the Ebitda margin fell from 12.1% in FY22 to 7.5% in FY23.

Looking ahead, management said that the various pro-growth measures taken by the government, especially in the rural, infrastructure and agriculture sectors, should improve the demand and consumption of the company’s products in the domestic market in the medium to long term.

With the Raipur plant operating/capacity utilisation improving, management is confident in tapping the untapped high-potential markets of central and eastern India, backed by expected positive trends in industrial growth over the next few years.