APL Apollo Tubes rating upgraded by CRISIL on strong financial outlook

CRISIL Ratings Limited has upgraded APL Apollo Tubes' long-term bank facilities rating to 'Crisil AA+/Stable' from 'Crisil AA/Positive', and reaffirmed its 'Crisil A1+' rating for short-term bank facilities. This upgrade, communicated on September 30, 2025, reflects the company's strong and improving business risk profile, dominant market position, and growing scale of operations. The total bank loan facilities rated amount to INR 1270 crore.

The upgrade is driven by healthy volume growth (CAGR of 22% over the past three years) and sustained profitability, with value-added products accounting for 58-60% of sales. The company's operating profitability moderated slightly to 5.9% in fiscal 2025 due to inventory losses from steel price declines but is expected to sustain at INR 4,500-5,000/tonne. APL Apollo's financial risk profile remains strong, with a gearing of 0.15 times for fiscal 2025 and a net debt-free position expected in the medium term.

Annual cash accrual is projected to exceed INR 1,000 crore in fiscal 2026, against debt repayment obligations of INR 200 crore and capex plans of INR 1500 crore between fiscal 2026-2028. The company’s liquidity is robust, supported by INR 941 crore in cash and equivalents as of March 31, 2025, and access to over INR 5700 crore in working capital limits.