Apollo Tricoat Tubes – Multibagger 2021 Analysis

In this article we can explore the possibility of Apollo Tricoat as a Multibagger 2021 Stock based on Value Investing principles.

Website http://www.beststeel.co.in/
CMPRs. 1050.00

About Apollo Tricoat Tubes

Apollo TriCoat (formerly known as Best Steel Logistics) is part of Sudesh Group of Companies, India’s leading steel pipe and tube manufacturer in 2018. A pioneer in making steel tubes and pipes of premium quantity, the the group has a manufacturing capacity of 2 million tons per annum.

The company is Headquartered in New Delhi and is part of the APL Apollo Group. Apollo is different from its competitors in their approach to the business. The Company is not into conventional products, and remains focused on absorbing contemporary technology from various geographies to manufacture new-age products, which are often the Pioneers to be introduced to India

Apollo TriCoat is manufacturing steel tubes, galvanized steel pipes, tubes and other products in a continuous single line process based on high quality standards. The company uses modernized technology to be a leading player in India.

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About Product Brands

The company owns reputed brands Apollo Chaukhat steel door frame, Apollo Elegant pipes, Apollo Signature galvanized pipes, Apollo Steel Plank, Apollo Wondoor which is complete door solution. Apollo Wondoor not only lends unmatched strength of steel and longevity to your doors but also keeps them termite, corrosion and fire-resistant. Besides, the smooth finish of Apollo Wondoor is sure to bestow a classy facade to your house.

Warren Buffet, Value & Growth Checklist

Capitalization3000 Crore
Sales Increasing past 3 YearsYes, 1000%bce05 green e1587451073732
Profit Increasing past 3 Years Yes, 1000% bce05 green e1587451073732
Durable Competitive Advantage Yes bce05 green e1587451073732
PE Ratio40
PB Ratio152d260 red
Debt Equity Ratio0.25
Intrinsic Value Discount90% bce05 green e1587451073732
Promoter Holding & Increase62%, Increased 24% bce05 green e1587451073732
Multibagger Returns300-500% 5 Year bce05 green e1587451073732

Positives

Company is Pioneer in their Products while their Niche Products attract new customers & enable returning customers. This helped the company to boost the growth year after year 30% above levels.

The company had the land (Malur) and other infrastructure available in proximity to APL which enable High Efficiency in logistics.

Company adopted “Three Steps Ahead”, which is their motto using 3 important elements of Competitive Advantage, A Single-line process that defines quality, The Three Layer Coating Advantage.

Company has reputed brands which allows returning customers & growth

The company is expanding its manufacturing facility in Bangalore with a 50% Capacity Expansion. This will increase the Demand Potential of the company in coming years while the Demand is already locked & growing.

Company is launching new products Apollo Hybrid, Apollo Scaff in the upcoming financial year which will give a boost to sales & profits.

Very High increase in Promoter Holdings of 24% is Visible.

ROE & ROCE are good.

Company has decreasing Debtor Days.

Company has Positive cash flow.

Company have Good Intrinsic Value Discount of 90%!

Negatives

The Covid continuation can delay the growth of the company.

China companies & rivals could be competition for the company.

The company is clocking at HIGH VALUATIONS with PE above 40, PB above 10 and almost Nil dividend yield.

No dividend payouts.

Company is trading at high price.

Company have moderate debt.

Summary

As per the R&D the company have Multibagger Potential. However, this is Not a Multibagger Recommendation & Investor due-diligence required.

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