Apar Industries Share price and Fundamental Analysis

Company History

Apar Industries Limited, founded by Late Shri. Dharmsinh D. Desai in the year 1958 is one among the established companies in India, operating in the diverse fields of electrical and metallurgical engineering offering value added products and services in Power Transmission Conductors, Petroleum Specialty Oils and Power & Telecom Cables. The Company is one among the top 3 global leaders in conductors, the 4th largest global transformer oil manufacturer, the largest domestic cable manufacturer in the renewable sector and a leading player in auto lubricants. The Company has strategic tie-ups with big global firms, such as ENI S.p.A, Italy, and CTC Global, USA. It has 4 subsidiaries as at 31st March 2022 comprising of Petroleum Specialities Pte. Ltd. Singapore (PSPL) - Wholly Owned Subsidiary of the Company, Petroleum Specialities FZE, Sharjah (PSF) - Wholly Owned Subsidiary of PSPL, Apar Transmission & Distribution Projects Private Limited (ATDPPL) - Wholly Owned Subsidiary and APAR Distribution & Logistics Private Limited - Wholly Owned Subsidiary of the Company.

Apar Industries (AIL), formerly known as Gujarat Apar Polymers was promoted by Apar, the flagship company of the Apar Group, along with the Gujarat Industrial Investment Corporation (GIIC). The Company was incorporated on September 28th, 1989.

In Nov' 2000 the captive plant for co-generation of power and steam has became operational. The Ankleshwar plant which was modernised with latest know-how of M/s Goodyear Tire & Rubber Co., USA for continuous processing of NBR in place of batch processing was completed and test running is in progress in 2000-01.

The Company's Nalagarh plant was commissioned during the year ended 31 March 2008. It was however, not fully loaded till December 2007 for the lack of orders. However, in Q4 March 2008, the capacity utilisation was improved to 70%. The company expanded Nalagarh plant's production capacity to avail the benefits of incentives of income tax, sales tax and excise duty.

During the year ended 31 March 2008, the company's Transformer and other speciality oils division commenced production of the 'Agip' brand automotive lubricants with the license and technical know-how of ENI-Spa of Italy and marketed the same through a 50:50 joint venture company, viz. Apar ChemateK Lubricants Limited.

On account of losses incurred during the financial year ended 31 March 2010 and also with carried forward losses of past years, the entire net worth of Uniflex Cables Ltd. (UCL) got eroded as at the end of the financial year March 31, 2010. Apar Industries has an equity investment of Rs. 834.37 million in UCL as at March 31, 2010. Considering the present net worth position of UCL, Apar Industries provided (non-cash charge) Rs.555.4 million in its 2009-10 accounts as an extraordinary item.

On account of brought forwarded losses of the previous years, the entire net worth of UCL's wholly owned subsidiary Marine Cables & Wires Private Limited (MCWPL) got eroded as at the end of financial year March 31, 2009 and MCWPL had filed required reference to BIFR in the month of October 2009. BIFR vide its order dated February 5, 2010 has declared MCWPL as sick industrial company and directed MCWPL to submit Draft Rehabilitation Scheme (DRS) for its revival. Apar Industries shall provide required support for its revival and the Board authorised the management to discuss the proposal to be submitted by MCWPL to BIFR for amalgamation of MCWPL with Apar Industries.

During the year ended 31 March 2011, Apar Industries' Transformer oil and specialty oils division recorded volume growth of approximately 5%. The conductors division's volume jumped 29.3% from 79510 MT to 102793 MT.

Pursuant to the reference made in accordance with the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial & Financial Reconstruction (BIFR) by Uniflex Cables Ltd. (UCL), it has been declared as Sick Industrial Company by BIFR vide its' order dated October 26, 2010 and directed UCL to file a fully tied up Draft Rehabilitation Scheme (DRS) u/s 17(3) of SICA for it's revival to Syndicate Bank who has been appointed as Operating Agency (OA) to examine the DRS. After having preliminary discussion with the management of the company, UCL has submitted DRS to OA which include amalgamation of the UCL with the company with cut off date as 31st March, 2010 for expeditious revival. The Scheme also provides for exchange of one equity share of the face value of Rs. 10 each of Apr Industries for ten equity shares of Rs 10 each of UCL.

After holding Joint Meeting of all the concerned parties by OA, it has submitted its' report on above DRS to BIFR on March 18, 2011. The shareholders of Apar Industries have approved the above DRS and also the exchange ratio subject to the final approval of the BIFR which is awaited.

As directed by BIFR, UCL's wholly owned subsidiary Marine Cables & Wires Private Limited (MCWPL) has submitted Draft Rehabilitation Scheme (DRS) which include amalgamation of the MCWPL with Apar Industries with cut off date as 31st March, 2010 to BIFR in July,10. BIFR has appointed Syndicate Bank as Operating Agency (OA) to examine the DRS and submit its' report to BIFR.

During the year ended 31 March 2012, on account of termination of sales contract on a mutually agreed basis for an overseas project in its conductors division, Apar Industries provided Rs.57.29 million as loss on account of settlement of position taken on London Metal Exchange (LME) to book the loss pertaining to forward LME positions. The company's cables division developed few new speciality cables during the year where margins are better and got good response from the customers.

In September 2012, Apar Industries acquired 47.5% stake from Chematek SpA in the distribution JV company viz Apar ChemateK Lubricants Ltd. (ACLL) for Automotive Oils and the said company has become subsidiary of the company.

During the financial year ended 31 March 2014, Apar Industries completed expansion of capacities to drive growth in high value products. Volumes of the company's Specialty Oil division grew 9.2% to 327,393 KL in FY 2014 from previous year volume of 299,866 KL.

During the year under review, the company made several changes and expansions in its cables division. The E-beam facility with both accelerators and associated handling equipment were commissioned. Major part of the equipment for Elastomeric cables was shifted from the old plant at Umbergaon to the new state of the art facility at Khatalwad doubling production capacity. The company took many steps to improve operational efficiency and de-bottlenecking. The expansion of the Opitcal Fibre capacity was completed in Umbergaon and Khatalwad. Approvals from major clients such as Railways, Defense, Bharath Broad Band Limited (BBNL), BSNL etc. were obtained.

FY 2015 was a record year in terms of volumes for Apar Industries' conductors division due to increased export business. During the year under review, the new continuous casting & rolling mill became operational in Athola. During the year, the first turnkey project for new generation High Temperature Low Sag (HTLS) conductors was successfully executed.

The auto lubes segment continued to grow despite slowdown in the auto market with sales up 11.5% YoY on a volume basis in FY 2015 driven by growing OEMs sales, increased promotions and direct channel marketing efforts. New range of products in motorcycle oils also helped increase sales.

On 18 November 2014, Apar Industries' wholly owned subsidiary Petroleum Specialities Pte. Ltd, Singapore (PSPL) incorporated a wholly owned subsidiary company in the Free Trade Zone, Sharjah, UAE for setting up a manufacturing facility in the Hamriyah Free Zone Authority, UAE for a comprehensive range of Speciality Oils and Lubricants. The plant will have State of the Art facilities to store, blend and process a wide range of Speciality Oils and Lubricants for the Power, Cosmetics, Industrial and Automotive verticals.

Apar Industries' Wholly-owned Subsidiary, Apar Lubricants Limited (ALL) (formerly Apar ChemateK Lubricants Limited) was amalgamated with the company by order High Court of Gujarat dated 23 October 2015. The Scheme of Amalgamation became effective from 10 November 2015 with retrospective effect from 1 January 2015, being the Appointed Date and the said business is now carried on as part of Apar Industries' Oil Division.

In FY 2016, volumes for Apar Industries' conductors division grew by 13% to reach 170,070 tonnes compared to 150,557 tonnes in previous year. During the year under review, the business division received its biggest order of ACCC & AL59 from UPPTCL and GETCO, respectively. In both cases, the orders are in excess of Rs. 50 crore. The business division also received an order for GAP Conductors from GETCO. The business division successfully completed the First Longest transmission line Re-Conductoring work with ACCC Casablanca conductor for Odisha Power Transmission Corporation ltd. Other projects completed in the high efficiency segment were: Varanasi to Sarnath Substation, Chinhat-Barabanki line, Hardoi Rd-NKN line for UPPTCL and New Pirana to Pirana Feeders (ACCC DRAKE), Pirana to Jamalpur S/S (ACCC LISBON), Vinzol-Vastral (ACCC Lisbon) for Torrent Power and Bamnauli Naraina DC Line for PGCIL.

The Specialty Oils division posted 2.6% growth in aggregate volume, highest ever volume till date led by Rubber processing oil, Auto & Industrial Lubricants and White Oils. The Auto Lubes segment continued to grow and delivered 2.9% volume growth to reach 23,480 KL, highest ever achieved despite demand from the rural sector being especially low.

During the year under review, the share capital of Apar Industries' downstream subsidiary Petroleum Specialities FZE (PSF) increased from US$ 40825 to US$ 34,05,995. PSPL holds 100% equity in PSF. Apar Industries' wholly owned subsidiary Petroleum Specialities Pte. Ltd, Singapore (PSPL) holds 100% equity in PSF.

During the financial year ended 31 March 2017, Apar Industries had offered to buyback upto 450,000 Equity Shares of face value of Rs. 10/- each at a price of Rs. 660/- per Equity Share (Buyback Price) payable in cash for an aggregate amount of up to Rs. 29.70 crore through Tender Offer. Against the offer, 2,28,150 Equity Shares were tendered by the shareholders for an aggregate amount of Rs. 15.06 crore and buyback was completed.

During the year under review, Apar Industries conductor plant in Jharsuguda and the Oils Plant in Sharjah became operational. The company's cable expansion plan also moved forward as per schedule. Volume for the period under review for the company's speciality oil division stood at 1,58,835 MT, lower than 1,72,257 MT in the previous year, as the company produced more of the high temperature conductors, which carry a larger value per unit of volume. During the year under review, the company's conductors division executed some challenging re-conductoring projects in Kerala, and Telangana, among others. In Q3 December 2016, Apar received its first large export order worth Rs 100 crore for high temperature conductors from an EPC contractor in North America.

The aggregate volumes of the company's Specialty Oil division rose 4% at 3,52,655 KL in FY 2017, led by increase in Transformer Oils (domestic), Transformer Oils (export), White Oil, Rubber Processing Oils and Auto Oils. The Auto Lubes segment delivered 6% volume growth to reach 24,893 KL, from 23,480 KL, despite the impact of demonetisation, which hit both the aftermarket segment as well as OEM sales in the short term.

Pursuant to the resolution passed by the shareholders, the company completed the process of closing down Quantum Apar Specialty Oils Pty. Ltd., Australia (Quantum) and made an application for voluntary de-registration with the Registrar of Companies.

Apar Transmission & Distribution Projects Private Limited (ATDPPL) was incorporated as a Wholly-owned Subsidiary of Apar Industries Limited on August 26, 2016 with the main objective of construction and installation, re-conductoring, and erection of overhead & underground T&D lines, among others.

During the year under review, Templeton Strategic Emerging Markets Fund III, L.D.C. (Templeton - Investor) sold its entire holding 3,636,363 Equity Shares held by it Apar Industries. Templeton thereupon withdrew the nomination of Mr. Rajesh Sehgal as Investor Director of the Company and ceased to be Investor Director with effect from 30 March 2017.

FY 2018 was a landmark year for Apar Industries as it marked its Diamond Jubilee year. FY 2018 saw all businesses of the company expand, with revenues returning to growth after two consecutive years of decline. The company delivered volume growth across all segments despite uncertainties and challenges emanating from the implementation of GST, and increase in raw material prices. In FY 2018, the volumes of the company's Conductors division grew 5% to reach 166,622 MT, compared to 158,835 MT in FY17. During the year under review, the company shifted 50,000 MT of conductor's capacity from Silvassa to Jharsuguda (Odisha), taking the total capacity to 80,000 MT, to avail cost and logistic benefits. Also, a new molten metal facility commenced operations at Lapanga for manufacturing rods.

Volume for the period under review for the company's speciality oil division stood at 388,513 KL, compared to 352,655 KL in FY17, led by strong growth in automobile oils, industrial processing oils, industrial lubricants and transformer oils. Volumes in the auto lubes segment have increased to 33,338 KL, up 34% from 24,893 KL in the previous year. The demand for auto lubricants remained strong, driven by OEM sales and the B2C segment, which Apar caters to via its network of 450 distributors and 15,000 stockiest across India.

Production at the company's power cables plant at Umbergaon was at close to full capacity level in FY18.

On 12 June 2017, M/s. Cema Optilinks Private Limited was incorporated as a Majority Owned Subsidiary of Apar Industries with the main object of carrying out small-scale business of manufacturing and trading in Fiber Optic cables.

On 18 July 2017, Apar Industries entered in to a Joint venture agreement with M/s. PPS Motors Private Limited (PMPL) and others and for the purpose incorporated a company in the name of 'M/s Ampoil Apar Lubricants Private Limited' (AALPL) which shall carry out the activities such as sale and / or distribution of lubricants including Engine Oils for various kinds of vehicles, machinery, mechanised equipment under the brand name 'Ampoil'. Apar Industries' share in the Joint Venture will be 40%.

In FY17, the Company commissioned a state-of-the-art speciality oil-blending unit in Hamriyah (Sharjah), which crossed sales volume of 50,000 KL in the first year itself, while being cash positive.

During the year, 22,437 ckms of AC transmission lines, 72,705 MVA of AC substations transformation capacity and 12,600 MW of inter-regional transmission capacity were added in FY19, showing good progress in the 13th Plan.

During the Financial Year 2018-19, the Company sold its entire holding of 9,900 equity shares of Rs 10/- each held in M/s. Cema Optilinks Private Limited (COPL), a majority-owned subsidiary Company, at par to promoters. With the sale of the aforesaid shares, COPL ceased to be a majority-owned subsidiary of the Company w.e.f. 18th September 2018.

In 2019-20, CTC for Transformers industry and Optical Ground Wire (OPGW) were launched. Medium Voltage Covered Conductor (MVCC)was launched. Execution started for Railway harness business.

In 2023, the Company launched a special premium grade of lubricants to support tractors and its equipment to function at optimum state; it launched special EV Tyres and harness for cables in electric vehicles.

In 2022-23, the Company incorporated a new Wholly Owned Subsidiary Company, in the name of CEMA WIRES & CABLES INC effective on April 26, 2022.