Apollo Pipes expects H2 recovery despite Q2 headwinds

Apollo Pipes Limited held its Q2 FY '26 earnings conference call on October 30, 2025, revealing 8% year-on-year consolidated sales volume growth. However, margins were pressured by lower capacity utilization and heightened competition. The company acknowledged significant headwinds from weak end-user demand and raw material price volatility, leading to a revised full-year volume growth guidance of approximately 100,000 tons. Management expressed confidence in a turnaround, anticipating improved demand post-monsoon and increased government infrastructure spending.

Strategic initiatives include product portfolio expansion into PLB ducts, DWC pipes, PE gas pipes, PVC-O pipes, and UPVC doors and windows. The company is also focusing on improving its product mix, particularly with CPVC pipes, aiming to increase their contribution to sales volume beyond 25% in the next 2-3 years through a tie-up with Lubrizol. Apollo Pipes incurred capital expenditure of INR92 crores in H1, with a full-year target of INR150 crores, funded by equity and internal cash flows without additional debt.

Future outlook remains positive, with expectations for double-digit ROCE within 1-2 quarters and eventually reaching 20-22%. The company foresees a potential 7-8% increase in PVC resin prices following the likely imposition of antidumping duties in November, which is expected to trigger channel partners to restock. Apollo Pipes aims to shift its product mix to 75% housing plumbing and 25% agri/water infrastructure in the next 2-3 years from the current 60% housing plumbing and 40% agri plus water infrastructure to improve EBITDA spreads.