Thematic Report 18276

India Equity Research Engineering and Capital Goods April 19, 2024
APAR INDUSTRIES
VISIT NOTE
KEY DATA
Rating NOT RATED
Bellwether with diversified growth
Sector relative NA
Price (INR) 7,074
12 month price target (INR) NA We recently visited Apar Industries’ manufacturing plants and also
52 Week High/Low
Market cap (INR bn/USD bn)
7,447/2,501
284.4/3.6
interacted with management, to gauge its growth prospects amid
Free float (%) 42% burgeoning power demand and green energy push (3–5% of total
Avg. daily value traded (INR bn) NA
project cost is C&W). Demand is also led by rising T&D spends to
connect the upcoming RE supply, data centres, EV charging ecosystem,
SHAREHOLDING PATTERN railways, etc along with an equally strong exports growth story.
Dec-23 Sep-23 Mar-23 Mar-23 Mar-22
Key takeaways: i) US to remain one of the key markets (~15% sales mix
Promoter 57.8% 60.6% 60.6% 6.54% 7.17%
FII 11.0% 9.1% 6.7%
currently),
3.03% 2.32%
but India to grow faster than exports. ii)
DII 18.6% 17.1% 18.0% C&W/conductors/oil
9.86% 0.07% segments (47%/31%/22% of sales mix) to grow
Pledge 12.6% 13.2% 14.8% atNA25%/15%/3%
NA CAGR over next few years. iii) Plausible shift towards
premium products may elevate growth/OPMs. Apar is not rated.
FINANCIALS (INR mn) Key takeaways from our plant visit/management interaction
Year to March FY20A FY21A FY22A FY23A
 What has worked for Apar so far? As per management, it was a strategic
Revenue 74,255 63,880 93,166 1,43,522
initiative to introduce premium conductor product offerings (~25% in FY19 to
EBITDA 4,662 4,155 5,479 12,270
~44% in FY23) while peers fell behind given Apar’s wider scale, design, and
Adjusted profit 1,351 1,605 2,567 6,377
manufacturing + turnkey capability and skilled manpower. However, the Covid
Diluted EPS (INR) 35.3 41.9 67.1 166.6
period premium in conductor pricing has tapered off now. Higher exports mix
EPS growth (%) -0.7% 18.8% 60.0% 148.4%
(~31% in FY19 to ~49% in FY23) led expansion into global markets across divisions
RoAE (%) 11.4% 12.5% 16.4% 32.3%
8.2 11.3 9.7 15.0
created synergies across verticals. The US alone imported ~USD500mn worth
P/E (x)
2.7 4.5 4.6 7.7 cables from India last year versus US’s total C&W imports of USD20bn-plus
EV/EBITDA (x)
3.3 3.2 2.3 1.6 implying large potential for capturing market share.
Dividend yield (%)
 Growth drivers/outlook: India’s transmission grid shall require ~INR2.4tn capex

over FY24–32, for ISTS connectivity of renewables (RE) given steep RE targets of
PRICE PERFORMANCE 500GW by 2030 (versus 144GW in FY24). Other high growth areas include
mobility, infrastructure, telecom, defence, etc (Exhibit 27). Exports potential
9,000 77,000
7,200 73,000 emanates from US’s infra capex plans of USD1.2tn (including transmission) while
5,400 69,000 Europe plans EUR584bn spends on grid expansion/stability by FY32.
3,600 65,000
1,800
0
61,000
57,000
 Guidance: As per management, C&W/Conductors segments are expected to
Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 grow at 25%/15% CAGR over the next few years with oil segment moderating to
Apar Sensex ~2–3% CAGR (transformer oil shall outgrow at ~20% CAGR). With price
realisations likely to normalise in the medium-term, management expects
conductors and oil to witness INR28,000 EBITDA/mt and INR5–6,000 EBITDA/Kl,
respectively, over the next few years.
 Competition: Apar enjoys 50–60%-plus market share in the conductor’s space

with Southwire, Midal, ZTT, HUIL, Sterlite Power, JSK being few competitors.
C&W is a crowded market with the likes of KEI, Polycab, RR Kabel, Havells, etc.
For oils, Savita Oil is the closest competitor.
 Valuation: Our peer valuation chart of key players across electrical equipment
supply chain (Exhibit 5) shows Apar to be relatively inexpensive versus other
peers given its likely growth on a high base (Bloomberg consensus estimate).
Subhadip Mitra Vijay Bhasin Sushil Dhoot

Subhadip.Mitra@nuvama.com Vijay.Bhasin@nuvama.com Sushil.Dhoot@nuvama.com
Nuvama Research is also available on www.nuvamaresearch.com, Bloomberg - NUVA, Thomson Reuters, and Factset Nuvama Institutional Equities
APAR INDUSTRIES
Financial Statements
Income Statement (INR mn) Balance Sheet (INR mn)
Year to March FY20A FY21A FY22A FY23A Year to March FY20A FY21A FY22A FY23A
Total operating income 74,255 63,880 93,166 1,43,522 Share capital 383 383 383 383
Gross profit 17,181 15,879 21,088 36,434 Reserves 11,282 13,709 16,770 21,981
Employee costs 1,688 1,604 1,725 2,205 Shareholders’ funds 11,664 14,092 17,152 22,364
Other expenses 10,831 10,121 13,884 21,960 Minority interest - - - -
EBITDA 4,662 4,155 5,479 12,270 Borrowings 2,820 2,131 2,529 3,042
Depreciation 871 934 978 1,043 Trade payables 28,480 30,381 41,225 52,066
Less: Interest expense 2,277 1,360 1,406 3,055 Other liabs & prov 3,575 3,483 5,170 4,705
Add: Other income 180 223 325 375 Total liabilities 46,538 50,087 66,075 82,177
Profit before tax 1,694 2,083 3,419 8,546 Net block 8,847 8,779 8,812 9,505
Prov for tax 343 478 853 2,168 Intangible assets (WIP) 0 - 2 2
Less: Other adj - - 1 0 Capital WIP 547 287 383 991
Reported profit 1,351 1,605 2,567 6,377 Total fixed assets 9,394 9,066 9,197 10,498
Less: Excp.item (net) - - - - Non-current inv. - 4 5 42
Adjusted profit 1,351 1,605 2,567 6,377 Cash/cash equivalent 1,762 2,218 2,666 5,301
Diluted shares o/s 38.3 38.3 38.3 38.3 Sundry debtors 19,017 18,690 25,424 32,256
Adjusted diluted EPS 35.3 41.9 67.1 166.6 Loans & advances 299 169 82 77
DPS (INR) 9.5 15.0 15.0 40.0 Other assets 16,066 19,940 28,700 34,003
Tax rate (%) 20.2% 22.9% 24.9% 25.4% Total assets 46,538 50,087 66,075 82,177
Important Ratios (%) Free Cash Flow (INR mn)

COGS (% of rev) 76.9% 75.1% 77.4% 74.6% Reported profit 1,351 1,605 2,567 6,377
Employee cost (%of rev) 2.3% 2.5% 1.9% 1.5% Add: Depreciation 871 934 978 1,043
Other exp (% of rev) 14.6% 15.8% 14.9% 15.3% Interest 1,816 1,048 1,056 2,280
EBITDA margin (%) 6.3% 6.5% 5.9% 8.5% Others -5,972 -1,245 -4,304 -5,480
Net profit margin (%) 1.8% 2.5% 2.8% 4.4% Less: Changes in WC 2,875 471 2,140 2,763
Revenue growth (% YoY) -6.8% -14.0% 45.8% 54.0% Operating cash flow 942 2,814 2,438 6,983
EBITDA growth (% YoY) -0.3% -10.9% 31.9% 124.0% Less: Capex -1,453 -558 -1,305 -2,478
Adj. profit growth (%) -0.7% 18.8% 60.0% 148.4% Free cash flow -511 2,256 1,133 4,505
Assumptions (%) Key Ratios

GDP (YoY %) 4.8% -6.0% 8.7% 6.4% RoE (%) 11.4% 12.5% 16.4% 32.3%
Repo rate (%) 4.4% 3.5% 4.0% 6.5% RoCE (%) 27.2% 21.6% 26.0% 49.9%
USD/INR (average) 70.7 73.0 74.5 81.0 Inventory days 83.6 110.0 93.7 80.3
Sales (Growth rate) -6.8% -14.0% 45.8% 54.0% Receivable days 99.4 107.7 86.4 73.3
Exports (rev gwth.) 3.3% 4.1% 35.2% 96.9% Payable days 195.4 223.8 181.3 159.0
Conductors (rev gwth) -8.0% -19.2% 44.4% 67.0% Working cap (% sales) 5.2% 8.1% 9.3% 7.0%
Oils (rev gwth) -12.1% 2.3% 50.6% 30.8% Gross debt/equity (x) 0.3 0.2 0.2 0.2
C&W (rev gwth) -4.9% -20.7% 56.9% 63.7% Net debt/equity (x) 0.1 0.0 0.0 -0.1
Tax rate (%) 20.2% 22.9% 24.9% 25.4% Interest coverage (x) 1.7 2.4 3.2 3.7
Valuation Metrics Valuation Drivers

Diluted P/E (x) 8.2 11.3 9.7 15.0 EPS growth (%) -0.7% 18.8% 60.0% 148.4%
Price/BV (x) 0.9 1.3 1.4 4.3 RoE (%) 11.4% 12.5% 16.4% 32.3%
EV/EBITDA (x) 2.7 4.5 4.6 7.7 EBITDA growth (%) -0.3% -10.9% 31.9% 124.0%
Dividend yield (%) 3.3 3.2 2.3 1.6 Pay-out ratio (%) 26.9% 35.8% 22.4% 24.0%
Source: Company and Nuvama estimates
2 Nuvama Research is also available on www.nuvamaresearch.com, Bloomberg - NUVA, Thomson Reuters, and Factset Nuvama Institutional Equities
APAR INDUSTRIES
Focus charts
Apar’s sales mix (FY23): Conductors + cables take lion’s share
Conductors Speciality Oils & Power/Telecom

•Revenue mix: 47% Lubricants Cables
•Exports mix: 51% •Revenue mix: 31% •Revenue mix: 22%
•EBITDA margin: 10% •Exports mix: 45% •Exports mix: 52%
•ROACE: 78% •EBITDA margin: 5% •EBITDA margin: 11%
•Order book: •ROACE: 31% •ROACE: 53%
INR51,240mn •Order book: NA •Order book:
INR12,210mn
Source: Company, Nuvama Research
Conductors drive half the business (~45–50%) with rising C&W/falling oil mix over the years
4% 8% 10% 10% 9% 12% 11% 13% 18% 19% 20% 21% 19% 20% 22%
45%
49% 51% 44% 44% 36%
54% 52% 35% 37% 32% 31% 36% 31%
36%
52% 48% 45% 51% 47% 48% 48% 47%

44% 44% 38% 44% 44% 43%
36%
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Conductors % mix Oils % mix Cables % mix
Nuvama Research is also available on www.nuvamaresearch.com, Bloomberg - NUVA, Thomson Reuters, and Factset Nuvama Institutional Equities 3
APAR INDUSTRIES
Higher exports and premium products’ sales mix lifted OPMs
60% 10.0%
8.6% 8.5%
9.0%
50% 7.2% 7.1% 8.0%
6.7% 7.0%
6.4% 6.3% 6.5% 38.1% 48.7%
6.1% 6.0% 35.6% 5.9% 7.0%
40%
41.1% 6.0%
30% 33.9% 34.3% 35.9% 34.0% 5.9% 5.0%
30.0% 30.4% 4.9% 32.0% 30.7%
27.9% 28.5% 4.0%
20% 24.5% 3.0%
1.9%
10% 2.0%
1.0%
0% 0.0%
Exports Mix (%) EBITDA Margin (%)
RoE versus RoCE (%)
60.0
49.9
48.0
36.0 30.8 29.1

27.7 26.4 27.2 26.0
(%)
21.6 32.3
24.0 17.9 16.6
12.0 18.7
15.4 16.4
13.6 13.5 11.8 12.5
11.4
0.0 7.0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
ROAE (%) ROACE (%)
APAR INDUSTRIES
Valuation snapshot across electrical equipment supply chain
Equities 2Y fwd. consensus PE EPS CAGR (FY24-26E)

Electrical Equipment
Savita Oil* 17.1x 0.7%
Hitachi Energy 61.1x 121.1%
GE T&D 68.5x 50.9%
CG Power 58.3x 27.9%
Siemens 65.9x 19.2%
TRIL 36.2x 141.6%
Schneider Electric 53.0x 20.4%
Voltamp 29.8x 5.9%
ABB India 82.9x 12.1%
Apar 26.5x 15.4%
Modern Insulators* 16.5x -5.1%
Genus Power 27.1x 103.3%
EPC
KEC 14.7x 75.4%
L&T 21.5x 29.8%
Kalpataru 16.7x 31.4%
Skipper 19.7x 38.0%
Cables & Wires
KEI 38.3x 23.3%
Polycab 35.3x 15.0%
Universal Cables* 15.2x 32.7%
Havells 47.0x 26.0%
Source: Bloomberg, Company, Nuvama Research Note: For Industrials’ coverage companies,
we have considered internal FY26 EPS whereas for remaining its consensus. For Savita Oil,
Universal Cables and Modern Insulators – current PE and FY21-23 EPS is considered.
APAR INDUSTRIES
Macro growth drivers, industry overview

Renewable energy
 As per management, the opportunity from renewable energy (RE) is huge across
Apar’s business verticals. It shall be a key beneficiary of generation, transmission,
and distribution of power.
 RE power generation: String cables, LV cables, Nacelle wiring, torsion cables,

tower cables, control cables, earthing cables, fire resistance OFC cables, LAN
cables. Cables account for 3–4% of total project cost.
 Power transmission (grid, sub-station): Transformer oil, CTC conductors, PICC

conductors, T&D traditional overhead conductors, T&D new generation
overhead conductors, OPGW, ADSS Cables, Turnkey Solutions, Medium Voltage
Covered Conductors.
 Power distribution: Application based cables and wires, light duty cables, FTTX
cables, ADSS cables.
Mobility
 Largest cables supplier for Vande Bharat trains.
 Market leader in supply of conductors for Indian railway electrification and

development of new product for bullet trains.
 E-beam based auto cables and harnesses for bus manufacturers such as JBM,
Olectra, as public transport goes electric.
Infrastructure
 Lubricants for off-road equipment for infrastructure development, which
includes, cranes, road construction, dredging, tunnel boring, mining equipment.
 Offering complete range of specialised cables that goes into infrastructure

equipment and infrastructure building.
 One of the largest suppliers of lubricant for tractor manufacturers and farming
equipment in India.
 Trusted lubricant supplier for natural gas pipelines, CNG stations and tunnel
boring machines, among other applications.
 Full range of lubricants for industrial applications across hydraulic, compressor,

metal working applications.
Transmission
 Distributed sites for RE require conductors, cables and transformer oils in RE
generation stage, substation, transmission lines, step-up/step-down circuit.
 Turnkey solutions in transforming India’s transmission lines with HTLS

conductors. Completed 150-plus power lines reconductoring projects. Supplied
35,000-pluskm HTLS and working satisfactorily. Technology tie-up with CTC-
Global, US for ACCC Conductors.
Telecom
 Apar’s range of product offerings include fibre optic cables, hybrid cables, LAN
cables, copper cables and OPGW conductors.
APAR INDUSTRIES
 Full set of cables for data centres and increasing approvals from consultants.
India’s transmission capex enters new leg of upcycle

India’s power demand-supply dynamics clearly portend aggressive RE addition of
30–40GW/year and thermal addition of 10GW-plus/year are required to avoid base
power deficits over FY28–30. Hence, RE + thermal additions are more of ‘a need’
than ‘a choice’ (refer to our power sector thematic). A natural deduction of such a
large-scale RE addition is the essential step-up in transmission connectivity to a
similar scale—(INR2.4tn as per CEA estimates). Given this backdrop, we estimate
PGCIL’s capex (a barometer for India’s transmission capex) shall likely grow by
almost 3x over the next two–three years. Over the next three–four years, the Indian
electric infrastructure grid shall require an estimated ~INR2.4tn in capex for inter-
state transmission connectivity in order for green energy capacity to reach 500GW
target by 2030. With concentration of RE resources in three key regions (Gujarat,
Rajasthan, Ladakh), the Government of India (GoI) has spotlighted large HV
transmission corridors for connecting the RE capacity with central transmission grid.
Addition of transmission lines (ckm) and transformation capacity (MVA) over past few years
FY23
FY22
FY21
FY20
FY19
FY18
FY17
FY16
FY15
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 1,00,000
cKm/MVA
Addition in transformation capacity (MVA) Addition in transmission line (ckm)
APAR INDUSTRIES
Apar has strong play across power generation, transmission and distribution given wide product offerings
Renewables capex to spur next cycle of T&D capex (inter-state)
1,000 400
800 320
Capacity (GW)
600 240
INR bn
400 160
200 80
- -
2018
2019
2011
2012
2013
2014
2015
2016
2017
2020
2021
2022
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
Thermal Capacity Renew Capacity Green Hydrogen T&D Capex (INRbn)
Source: CEA, PGCIL, Nuvama Research
APAR INDUSTRIES
Transmission system for RE capacity by 2030 New T&D lines to drive conductors growth
Source: CEA, Nuvama Research Source: CEA, Nuvama Research
Upcoming transmission capex cycle expected to dwarf previous cycle (FY24–30E)
INR2,400bn-plus central capex by FY2030E
52 58 65 72 175 175 175

(INR bn)
43 47 240
34 38 226 245 80
31 178 200 223 225 258 258 153 40 80 80 254 255 256
28 121 113 91 88 148
106 254 200 175 204 181 161 182 175 173 177 175 175
108 135 149 144 156 161
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Cum. FY24-
FY23e
FY24e
FY25e
FY26e
FY27e
30e
State Transcos PGCIL Private CEA target
Source: PGCIL, PFC India, CEA, Nuvama Research
PGCIL’s capex to grow 3x, assuming 40% share of INR2.4tn capex
300
258 255
240
180
(INR bn)
120
91
60
-
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
Annual Capex
Source: PGCIL, Nuvama Research
APAR INDUSTRIES
Value chain (FY23): Market size by product and top players thereof
Power Transformers Market size: Distri. Transformers Market size: Capacitors Market size:
INR65bn INR63bn INR7bn
Top players: Hitachi Top players: Hitachi Top players: Hitachi
Energy, GE T&D, CG Energy, TRIL, CG Energy, CG Power
Power, Siemens, Power, Siemens,
TRIL, BHEL Schneider, Voltamp
Market size: Switchgear (HV & LT) Market size: Cables (LV & HV) Market size: Insulators
INR49/326bn INR662bn INR10bn
(HV/LV) Top players: Apar, Top players: Hitachi
Top players: Hitachi, KEI, Polycab, Energy, Aditya Birla
GE, CG, SIEM, Universal, Havells Insulators, Modern
Schneider, ABB Insulators
Energy Meters Market size: Transmission tower Market size: Conductors Market size:
INR27bn INR95bn INR107bn
Top players: Genus Top players: L&T, Top players: Apar
Tata Projects, KEC,
Kalpataru, Skipper
Source: IEEMA, Nuvama Research
Conductor market
In FY23, the total market size of conductors reached INR146bn, up from INR115bn
in FY19, registering 6.2%CAGR. Major factors influencing this demand include
railway electrification, healthy transmission line additions, Northeast System
Strengthening Scheme and increased international demand. Key growth drivers are
as follows:
 Growing shift towards high temperature low sag (HTLS) conductors:
A pickup in demand for high-voltage conductors is expected, given increasing
focus on adding transmission lines of higher voltage levels, for evacuation of bulk
power. Furthermore, the importance of high-voltage (HV) lines of 400 kV and 765
kV in the intra-state transmission network is also increasing, as higher voltage
level enhances power density, reduces losses, and efficiently delivers bulk
power. Growth of market size in FY22 against a drop in market volume and higher
growth rate of market size in FY23 than market volume symbolises the shift of
the market towards premium products.
 Key government projects: GEC and railway electrification Green Energy Corridor
(GEC) and railway electrification shall provide necessary boost to the power
conductor sector. GEC is the transmission system for evacuation of power from
RE sources. In FY22, the PGCIL board approved projects worth INR37.1bn
towards strengthening of existing infrastructure against approved projects of
only INR2.4bn in FY21. The growth in approvals in future shall be largely towards
RE segment projects, with capacity additions shifting towards renewable
generation mix in pursuit of India’s target to source 50% of electricity
requirement from non-fossil fuels, necessitating a heightened demand for power
conductors and, thus, boosting the sector. Moreover, Indian Railways, to reduce
fuel costs and lower its carbon footprint, has prioritised railway electrification
projects along with online upgradation for higher speed trains. In FY22 and FY23,
electrification accelerated and achieving a high of 6,366 route kilometres (rkm)
and 6,656 rkm on the back of stronger execution, reached cumulative
electrification of ~52,247 rkm and ~58,903 rkm at the end of FY22 and FY23,
APAR INDUSTRIES
respectively. Railway authorities are targeting full electrification of the network

within the next two years, thereby indicating strong demand for conductors in
the medium term. Furthermore, along with railway electrification, Indian
Railways is also working on line upgradation for higher speed trains, which is
expected to provide increased demand for conductors.
 Addition of state transmission lines: The ongoing capacity addition in the power
generation sector shall play a vital role in boosting demand for power conductors
as these would be needed to efficiently transmit electricity from these new
power generation sources to distribution points.
 Increased multilateral investments in power transmission projects: Multilateral

organisations such as the World Bank through its arms, IDA and IBRD are
continuously investing in many projects in the power transmission space across
regions such as Africa, Central Asia, South and East Asia, which is expected to
benefit the export segment of the overall electrical equipment industry,
including power conductors. World Bank funding increased by 55% in 2020 vis à
vis 2019, which shows higher potential for exports for Indian power conductor,
going forward.
Conductor market projected to grow at CAGR of 7.2% with Apar’s market share to penetrate further, going ahead
200 48.0% 60.0%
44.7%
35.3% 33.8% 180
160 43.7% 40.0%
146
120 20.0%
(INR bn)
(%)
102
80 94 0.0%
86
40 -12.0% -20.0%
-17.0%
-27.5%
- -40.0%
FY20 FY21 FY22 FY23E FY26P
Market Size (INR bn) Volume growth rate (%) Apar's revenue market share (%)
Source: Crisil MI&A, Company, Nuvama Research
Market shifting towards premium products

55.3%
43.7%
9.3%
-11.3%
-15.7%
-12.0%
-17.0%
-27.5%
FY20 FY21 FY22 FY23E
Market Size Growth Rate Market Volume Growth Rate
Source: IEEMA, Crisil MI&A, Company, Nuvama Research
APAR INDUSTRIES
Railway electrification drives growth over past few years
7,500
6,656
6,366
6,015
6,000
5,276
(Route Kilometers)
4,378
4,500 4,087
3,000
1,646
1,500
-
FY17 FY18 FY19 FY20 FY21 FY22 FY23
Power & telecom cables

In FY23, the cables and conductors’ market was valued at INR1,196bn, up from
INR859bn in FY19, registering a CAGR of 8.6%. This notable surge can be primarily
attributed to a remarkable growth of HV and EHV - above 33KV cables and
elastomeric cables, which have registered exponential growth on the back of
increased expansion of transmission lines and electrification initiatives in rural areas.
Other cable categories contributing substantially to the accelerated market growth
include PVC control cables & instrumentation, building wires, and switchboard
cables, driven by a pickup in construction activities in both commercial and
residential sectors post covid-19. Further ongoing infrastructure development
projects and rural electrification initiatives, surge in construction activities and
increasing digital connectivity are expected to drive growth in this industry.
 Increasing demand for E-beam irradiated cable: Within the wire and cable
sector, electron beam (E-beam) irradiation offers improved cross-linking and
polymer modification for wire, cable, and tubing items. Typically, this process
does not necessitate additives and poses no risk of generating hazardous
chemical by-products, thereby proving to be more eco-friendly than
conventional wires. This technology leads to the enhancement of their
mechanical, thermal, and chemical-resistant properties, resulting in overall
improved physical characteristics. This includes reduced thickness, higher
temperature resistance, and increased current-carrying capacity, ultimately
extending the cables' lifespan. Moreover, e-beam cross-linking not only
augments durability and current capacity but also mitigates the risk of fires
caused by overload or short circuits, thus safeguarding lives and property. Due
to their extended lifespan and superior performance compared to traditional
cables, e-beam cross-linked cables are witnessing increased demand owing to
their widespread adoption in commercial, industrial as well as medical industry.
 Share of exports of wires and cables in total market to increase: The exports of
wire and cables surged to INR132bn in FY23 forming ~11% of the total market,
marking a substantial increase from INR78bn in FY22 and registering a YoY
growth of ~69%. This growth can be principally attributed to heightened
international demand stemming from the ‘China Plus One’ strategy and
investments in transmission projects by organisations such as International
APAR INDUSTRIES
Development Association (IDA) and the International Bank for Reconstruction

and Development (IBRD). Key export partners include the US, UK, UAE, Italy, etc.
 Demand for C&W expected to grow exponentially from RE sector due to

planned capacity expansion: Demand for wires and cables in the renewables
sector, specifically in solar and wind applications, has experienced noteworthy
growth in tandem with the global shift towards sustainable energy sources. Due
to increased focus on renewable energy by corporate and government alike, the
solar as well as wind industry are growing at a remarkable pace. The solar cables
industry in India is propelled by factors including growing embrace of renewable
energy, government initiatives and subsidies for solar projects, and an escalating
awareness regarding the advantages of clean energy. The demand for high-
quality cables in wind energy projects arises from the need for reliable power
transmission from the wind turbines to distribution networks.
 Favourable government power distribution schemes: The domestic power

cables industry is expected to witness moderate growth driven by Revamped
Distribution Sector Scheme (RDSS), which is aimed at network modernisation
and system loss reduction, Power Grid Corporation of India’s (PGCIL)
investments on system strengthening, new GEC projects, and state transmission
line additions.
 Entry of private players in T&D space: At present, private sector participation in

the T&D space is low. However, with the introduction of tariff based competitive
bidding (TBCB) and viability gap funding schemes for intra/inter-state projects,
the share of private sector players in the power transmission sector is expected
to increase gradually over the long-term. This move is purportedly to shift the
burden from PGCIL and increase private sector participation in the sector, though
PGCIL is also allowed to bid for the same. With increased awarding of projects
under TBCB in the future, private participants are expected to play a key role in
driving domestic power demand, thereby positively impacting the demand for
cables including transmission and power cables.
 Healthy construction investments in building segment: CRISIL MI&A estimates

construction capex in the building and construction sector to grow from INR12–
12.5tn during FY19–23 to INR16–16.5tn during FY25–28. This growing demand
for residential and commercial spaces shall necessitate increased demand for
cables, especially housing cables as well as communication cables due to faster
digital transformation, which is expected to provide additional boost to the
overall cable industry. Moreover, the emergence of data centres and cloud
computing also presents promising opportunities for growth and development
within the cable sector.
APAR INDUSTRIES
Indian C&W market projected to grow at 12.4% CAGR from FY23–26E

1,800 24.1% 27.0%
1,600
1,400 18.0%
11.5%
1,200
9.0%
(INR bn)
1,000 2.1% 1.8% 2.7%
(%)
800 2.2%
0.0%
600 -8.1%
400 -11.6% -9.0%
200
781 696 922 1,196 1,700
- -18.0%
FY20 FY21 FY22 FY23E FY26P
Market Size (INR bn) Volume growth rate (%) Apar's revenue market share (%)
Source: CRISIL MI&A, Company, Nuvama Research
Market size of solar and wind cables
1,500
1,200 160
900 83
(INR mn)
600 116 153

1,080
857
90
300 524
505
315
-
FY19 FY20 FY21 FY22 FY23E
Solar Cables Wind Cables
Transformers and speciality oils

In FY23, the total market size of the Indian speciality oil market is estimated to be
INR570bn, up from INR460bn in FY19, registering CAGR of 5.5%. Automotive,
manufacturing and heavy engineering make up more than 60% of the market as of
FY23. Growth in end-use segments such as pharmaceuticals, consumer foods and
factors such as favourable demographics, rising disposable income and government
initiatives like the production-linked incentive (PLI) scheme are expected to drive
growth in the market.
 Pharma and consumer sectors poised for high growth: Factors such as
government initiatives for development of local manufacturing infrastructure
and reducing dependency on imports, growing penetration of sales channel in
tier 3 and 4 cities, rising living standards, and growing awareness about hygiene
would drive growth across sectors such as pharma, personal care, and food and
beverages.
 Increasing demand for two-wheelers, passenger, and commercial vehicles to

aid automotive segment: By 2030, India is likely to be the third-largest
automobile market globally in terms of volume. The Indian automotive market
APAR INDUSTRIES
shall be driven by rising income, a younger population, increasing vehicle

penetration, growing R&D hubs, and government initiatives in the automotive
sector. The latter includes Atmanirbhar Bharat Abhiyaan and PLI scheme to boost
manufacturing of advanced automotive technology products and attract
investments in the automotive manufacturing value chain. Other significant
growth drivers of the Indian automotive business include easy access to credit
and financing, low-cost steel manufacturing, flourishing logistics and passenger
transport sector, and availability of cheap labour.
 PLI scheme to provide boost to industrial investments in short to medium term:

Construction spends across industrial investments in FY23 saw a 7–10% rise due
to a high base in FY22 where the sector grew due to deferred investments from
FY21 and capex investments from the PLI scheme coming online. Based on an
analysis of eight key sectors, CRISIL MI&A estimates construction investment in
the industrial segment at INR2.8–3tn between FY24 and FY26, rising 1.2x over
spends seen in FY21 and FY23. The rise in investments is projected due to
inclusion of PLI scheme in capex investments of the industrial sector.
 Growth in manufacturing industry: With the increase in manufacturing

opportunity in India, capacity, speed and automation in manufacturing industry
shall increase. The rise in capacity, speed and automation in the manufacturing
industry shall lead to higher consumption of lubricants as well as higher value for
performance and protection of more sophisticated equipment.
 Adoption of supply chain de-risking strategy: China currently controls a

significant portion of the global supply of lubricants. However, the Indian
lubricant industry is anticipated to report a swift increase in foreign investment
because of the strategy of companies across the world, and particularly in
Europe, to de-risk the supply chain.
 Government initiatives: The Government of India has launched PLI schemes for
14 sectors, which includes pharmaceuticals, food products, auto (automobile
and auto components), and textiles. The scheme is expected to attract
investment, enhancing core competency, and bringing cutting-edge technology,
ensuring efficiencies, creating economies of scale, enhancing exports, and
making India an integral part of the global supply chain. Government initiatives
for infrastructure development and manufacturers extending their production
capacities are projected to propel India's lubricant market in the near future.
APAR INDUSTRIES
Indian speciality oil market projected to grow at CAGR of 8.1% over FY23–26E
875 10.0%
8.2%
750
8.0%
625 6.4%
5.7%
4.8% 4.9% 6.0%
500
(INR bn)
(%)
375
4.0%
250
2.0%
125
460 482 481 553 570 720
- 0.0%
FY19 FY20 FY21 FY22 FY23E FY26P
Indian speciality oil industry by end-use segments (INR bn)
FY23E
FY22
FY21
FY20
FY19
- 125 250 375 500 625

INR bn
Automotive Manufacturing Pharmaceutical
Food & Beverages Others Power Generation
Heavy Engineering Equipment Personal Care & Cosmetics Transmission & Distribution
APAR INDUSTRIES
Value chain of manufacturing process

Aluminium bars as supplied by metals suppliers Heated at 110degrees (liquid) and strung into wire
Source: Company, Nuvama Research Source: Company, Nuvama Research
Carbon fibre core embedded within conductor Multiple wires wound into braided conductor
APAR INDUSTRIES
Company Overview
Apar Industries was started in India in 1958,. Over 60 years later, it has grown into a
diversified billion-dollar-plus company and expanded to over 140 countries as a
highly trusted manufacturer and supplier of conductors, a wide variety of cables,
speciality oils, polymers, and lubricants.
Apar is a diversified manufacturer primarily serving customers in the global energy
infrastructure sector. It is India’s largest player in terms of sales of conductors, one
of the leading exporters of conductors and cables and one of the three key players
in the domestic renewable cables segment.
The company is India’s largest private manufacturer of specialty oils in terms of
manufacturing capacity as of FY23. Apar operates through three key business
segments, namely (i) conductors; (ii) transformer and specialty oils; and (iii)
power/telecom cables. It owns and operates eight manufacturing facilities in India
and one manufacturing facility in Sharjah, UAE, which are strategically located to
receive materials from their suppliers as well as deliver products to their customers.
Moreover, it has also introduced telecom solutions as a separate vertical, under
which it provides various solutions to customers, including OFC solutions, LAN and
5G solutions, convergence solutions and network services to customers. Hybrid
cables address telecom and power convergence across 5G, IOT and M2M.
Apar has robust product research & development capabilities, which it believes have
been a cornerstone of its stellar performance. It works closely with its customers in
developing customised products and providing solutions that meet their specific
requirements for end applications. The company has a track-record of introducing
various premium and innovative products, including to meet its customers’ specific
requirements.
Apar’s journey so far…
1958-1969
1 1958: Company incorporated with Conductor business
1969: Successfully diversified into speciality oils business (oil refinery in Mahul, Chembur)
1970-2002
2 1998: Greenfield expansion to meet growing oils demand (setup Rabale oils plant)
2000-02: Greenfield expansion into tax free jurisdiction (setup silvassa oils and conductors plant)
3 2003-2012
2007: Diversification into Auto lubes segment (license agreement ENI Italy)
2008: Entered cables business to expand portfolio and forward intergration (UNIFLEX acquisition)
2010: State-of-the-art R&D unit setup at Rabale (global presence in 100+ countries)
2012: New gen-tech to build largest e-beam facility in India (APAR Cable Solutions)
TIMELINE 4
2013-2016
2013: Greenfield expansion to meet growing conductors demand (conductor plant setup at Athola)
2016: Introduced Dull-finish conductors with special surface treatments which are environment friendly
(setip conductor plant in Jharsuguda & oils plant in Sharjah)
2017-2019
5
2018: Commissioning of Sharjah plant
Signed agreement with Hindalco for molten metal
Parallel capacity expansion at Cables, Khatalwada plant
2019: Only Indian company to supply all major HVDC projects with Transformer Oils
60% market share in domestic wind sector for cables
2020-2023
6
2021: 1st Indian player to create guidance OFC for torpedoes
1st Indian company to get an AdBlue certification by VDA-Germany
2022: Signed Sonu Sood as Brand Ambassador
Signed an MOU with Lubref to examine building a WO and TO plant in Saudi Arabia
2023: Executed largest safest and fastest ACCC reconductoring project in Bihar, India
No. 1 exporter of Cables & Wires from India in FY23
APAR INDUSTRIES
Apar’s journey to becoming the world’s largest manufacturer of conductors with

loyal customers in 107 countries spans across six decades. As a leading global
supplier, it offers a full range of both conventional and new-generation speciality
conductors.
The cable division has been steadily growing at over 23% CAGR for the last ten years
for the company. This is made possible by its extensive investments in equipment
(only Indian company with four e-Beam facilities), innovation and wide product
range.
As one of the largest industrial and automotive lubricant manufacturers in India,
Apar is present in nearly every industry segment. It has ensured that its range of over
150 grades meets the latest BIS and other international standards. Apar’s journey to
becoming India’s largest private blender and marketer of speciality oils is a 50 year-
long one. Over five decades, it has scaled its business to staggering annual volumes
of 400,000 KL in India and 120,000 KL in the UAE. It offers a comprehensive range of
over 350 grade oils, with 500-plus variants of transformer oils, white oils, petroleum
jelly and process oils.
Well diversified business across multiple segments and industries
What edge does Apar have?

Industries Products Advantage
One of the largest manufacturers of aluminium and alloy conductors in the
world
Power T&D and RE Conductors, Cables and Transformer oils (T-oils)Third-largest global manufacturer of transformer oil
Wide range of cable solutions viz., solar, wind, nuclear, mining, defence, navy,
railways, housewires in India
Indian Railways Copper Conductors, XLPE & Elastomeric Cables & Largest
Harnesses
manufacturer of conductors; wide variety of cables
10th largest domestic player in lubricant
Automotive Auto Lubes, Automotive Cables License agreement with ENI Italy to manufacture and market high-end
automotive and specialty lubricants
Telecom Optical Fibre Cables (OFC), Optical Ground Wire Manufacturer
(OPGW) of wide range of power and telecom cables
Defence Elastomeric Cables & Speciality Cables Major supplier of speciality elastomeric cables to the Indian Navy and DRDO
Exports in over 140+ countries
Europe, Africa, the Middle East, Asia, and the Americas
Exports 49% of revenue contribution in FY 2023
Received several awards and certifications; Top Exporter Award from
Engineering Export Promotion Council
APAR INDUSTRIES
Apar owns and operates eight integrated manufacturing facilities across India and
one in Sharjah, UAE. All of its plants are equipped with accredited laboratories,
where it carries out intensive testing of its products, for quality control and
compliance with the specifications provided by its customers. It also expanded
capacity in Umbergaon and undertook long-term consolidation at Katalwada facility.
Manufacturing facilities across business verticals
Transformers & Power/telecom

Conductors
Speciality Oils cables
•Athola, Daman & Diu •Silvassa, Daman & •Umbergaon,

•Silvassa, Daman & Diu Maharashtra
Diu •Rabale, Maharashtra •Khatalwada,
•Jharsuguda, Odisha Maharashtra
•Lapanga, Odisha
Production capacity by segment- has inched up over past few years

FY23 H1FY24
Unit of
Segment Installed Actual Capacity Installed Actual Capacity
Measurement
Capacity Production Utilisation Capacity* Production* Utilisation
Conductors MT 1,70,391 1,66,008 97.4% 1,01,191* 98,307 97.1%
Transformers & Speciality
KL 9,34,600 4,87,955 52.2% 4,67,300* 2,26,604 48.5%
Oils
Power/telecom cables KM 4,79,000 3,80,634 79.5% 3,18,000* 2,04,131 64.2%
Source: Company, Nuvama Research. Note: Installed capacity for the period six month ended September 30, 2023 is calculated on proportionate
basis.
Segmental snapshot as of FY23
Conductors Speciality Oils & Power/Telecom

•Revenue mix: 47% Lubricants Cables
•Exports mix: 51% •Revenue mix: 31% •Revenue mix: 22%
•EBITDA margin: 10% •Exports mix: 45% •Exports mix: 52%
•ROACE: 78% •EBITDA margin: 5% •EBITDA margin: 11%
•Order book: •ROACE: 31% •ROACE: 53%
INR51,240mn •Order book: NA •Order book:
INR12,210mn
APAR INDUSTRIES
Conductors
Conductors are crucial in efficiently transmitting electrical energy from power
generation sources to end consumers, primarily through overhead power lines. Apar
is India’s largest player in terms of sales of conductors in FY23, and one of the leading
exporters of conductors and cables from India during the same fiscal year. Apar
supplies conductors to customers, including in the renewable energy space. They
manufacture conventional conductors and premium conductors, including HTLS
conductors, ACCC conductors, solid-shaped conductors, railway conductors,
specialty alloy rods; CTC/PICC, BUSBAR, air expanded conductors, and dull finished
conductors. In line with its increased focus on premiumisation, it has also added
copper conductors for railways, copper transpose conductors for transformers, and
OPGW wires for power and telecommunication to its product offerings. For its ACCC
conductors, it has entered into a technology tie-up with a US-based company.
It has also leveraged its experience in the conductors’ business to provide end-to-
end turnkey solutions, such as re-conductoring with HTLS and live line installation
with OPGW. As on Sep-23, Apar has successfully completed over 150 power lines re-
conductoring projects of setting up of HTLS conductors over 35,000ckm. It also
possesses expertise in hotline stringing and live line replacement of OPGW.
Premium/HEC conductors have seen increased usage over time (grown from ~25% in FY19 to ~44% in FY23)
APAR INDUSTRIES
Conductors product portfolio
Premium sales mix mirrors OPM growth …and higher price realisations (EBITDA/mt)
60.0% 12.5% 2,00,000 50,000

49% 44%
48.0% 10.0% 1,60,000 40,000
38%
(EBITDA/mt)
33% 10.2% 1,20,000 30,000
36.0% 7.5%
(mt)
25%
24.0% 5.0% 80,000 20,000
5.2%
4.4% 4.6% 40,000 10,000
12.0% 3.4% 2.5%
0 0
0.0% 0.0%
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY19 FY20 FY21 FY22 FY23
Premium mix (%) EBITDA Margin (%) Volume (mt) EBITDA/mt
Power and telecom cables

Apar is one of the leading exporters of conductors and cables from India. It is also
one of the three key players in the domestic renewable cables segment within the
country. It manufactures specialised cables and wires, which include high-voltage
power cables, medium-voltage, and low voltage XLPE cables, elastomeric cables,
hybrid cables fibre optic cables and specialty cables. Its cables have a diverse range
of applications across industries, including in power transmission and distribution,
nuclear power, railways, and defence sectors. It also has a presence in the retail
market through its light duty cables powered by e-beam technology, sold under the
APAR Anushakti brand of house wires, APAR Mahashakti, APAR Shakti and APAR
Tarang Shakti brands. It has also introduced automotive cables and harnesses for
electric buses, as well as harnesses for EV charging. E-beam technology for house
wiring - first mover advantage and the only company using this technology giving
the product has a 50- year life, melt resistant and flame retardant till 105degrees.
Apar is India’s only cable company with four e-Beam irradiation facilities.
Cables and wires segment caters to multiple industries including but not limited to
power transmission and distribution, renewable energy, railways, defence,
automobiles, IT/data centres, real estate, industrials, etc.
APAR INDUSTRIES
Cables & wires product portfolio
Inferior C&W OPMs versus peers – scope to polish Strategic focus on C&W exports driving OPMs
12.5% 35,000 62.5% 11.3% 11.1% 12.5%

11.2%
10.5%
10.0% 11.4% 28,000 50.0% 10.0%
10.7% 52%
9.7%
7.5% 8.7% 21,000 37.5% 7.5%
INR mn
5.5% 5.3%
(%)
5.0% 6.1% 6.2% 14,000 4.7%

25.0% 5.0%
4.7% 29%
2.5% 7,000 20%
12.5% 17% 2.5%
0.0% 0 10%
0.0% 0.0%
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY19 FY20 FY21 FY22 FY23
Revenues EBITDA margin (%) Exports Mix (%) EBITDA Margin (%)
Presence in light duty cables growing exponentially
31st Mar'22 31st Mar'23
Distributor presence
19 120
Retail count presence

276 2,395
Retail state presence

2 13
Demo's
6,348 35,353
Electrician meets
474 3,373
APAR INDUSTRIES
Transformers and speciality Oils

Specialty oils refer to a group of mineral oil-based products used across diverse
sectors, including for cooling and heat transfer, chemical characteristic alteration of
compounds, lubrication and wear-and-tear protection, and product finishing.
Apar is India’s largest private manufacturer of specialty oils in terms of
manufacturing capacity. It manufactures transformer oils, automotive and industrial
lubricants, hydraulic and turbine oils, transformer oils for up to 800KV voltage class,
technical grade and food grade white oils, and petroleum jelly and metalworking
fluids under this segment. Apar is also the world’s third largest transformer oil
manufacturer and has a 60% market share in power transformers.
Oil/lubricants product portfolio
APAR INDUSTRIES
EBITDA margins remain volatile (lower price realisations) as volumes grow a mere ~4.5% in FY14–23
12.5% 11.4% 11.9% 6,25,000

10.5%
10.0% 5,00,000
7.9% 8.2% 8.2%
7.5% 3,75,000
5.8%
(KL)
5.3%
(%)
4.8% 5.1%
5.0% 2,50,000
2.5% 1,25,000
0.0% -
Volume EBITDA Margin (%)
APAR INDUSTRIES
Company financials
Conductors drive half the business (~45–50%) while higher C&W mix over the years has been traded with oil segment
4% 8% 10% 10% 9% 12% 11% 13% 18% 19% 20% 21% 19% 20% 22%
45%
49% 51% 44% 44% 36%
54% 52% 35% 37% 32% 31% 36% 31%
36%
52% 48% 45% 51% 47% 48% 48% 47%

44% 44% 38% 44% 44% 43%
36%
Conductors % mix Oils % mix Cables % mix
Revenues breakdown as of FY23
Exports
14%
3%
Industries/Corporate
7% OEM's
49%
5%
EPC - Transmission
6% Companies
Utilities - Transmission
17% Companies
Renewables
APAR INDUSTRIES
Higher exports and premium products’ sales mix lifted OPMs
60% 10.0%
8.6% 8.5%
9.0%
50% 7.2% 7.1% 8.0%
6.7% 7.0%
6.4% 6.3% 6.5% 38.1% 48.7%
6.1% 6.0% 35.6% 5.9% 7.0%
40%
41.1% 6.0%
30% 33.9% 34.3% 35.9% 34.0% 5.9% 5.0%
30.0% 30.4% 4.9% 32.0% 30.7%
27.9% 28.5% 4.0%
20% 24.5% 3.0%
1.9%
10% 2.0%
1.0%
0% 0.0%
Exports Mix (%) EBITDA Margin (%)
Working capital led business – higher profitability driving earnings growth
8,000 10.0%
8.6% 8.5%
4,000 7.2% 7.1% 7.0% 8.0%

6.7% 6.4% 6.5%
6.1% 6.0% 6.3%
5.9% 5.9%
0 6.0%
(INR mn)
4.9%
(%)
-4,000 4.0%
1.9%
-8,000 2.0%
-12,000 0.0%
Changes in Working capital Cash from Operating Activities EBITDA margin %
RoE versus RoCE (%)
60.0
49.9
48.0
36.0 30.8 29.1

27.7 26.4 27.2 26.0
(%)
21.6 32.3
24.0 17.9 16.6
12.0 18.7
15.4 16.4
13.6 13.5 11.8 12.5
11.4
0.0 7.0
ROAE (%) ROACE (%)
APAR INDUSTRIES
Valuation snapshot across electrical equipment supply chain
Equities 2Y fwd. consensus PE EPS CAGR (FY24-26E)

Electrical Equipment
Savita Oil* 17.1x 0.7%
Hitachi Energy 61.1x 121.1%
GE T&D 68.5x 50.9%
CG Power 58.3x 27.9%
Siemens 65.9x 19.2%
TRIL 36.2x 141.6%
Schneider Electric 53.0x 20.4%
Voltamp 29.8x 5.9%
ABB India 82.9x 12.1%
Apar 26.5x 15.4%
Modern Insulators* 16.5x -5.1%
Genus Power 27.1x 103.3%
EPC
KEC 14.7x 75.4%
L&T 21.5x 29.8%
Kalpataru 16.7x 31.4%
Skipper 19.7x 38.0%
Cables & Wires
KEI 38.3x 23.3%
Polycab 35.3x 15.0%
Universal Cables* 15.2x 32.7%
Havells 47.0x 26.0%
Source: Bloomberg, Company, Nuvama Research Note: For Industrials’ coverage companies,
we have considered internal FY26 EPS whereas for remaining its consensus. For Savita Oil,
Universal Cables, and Modern Insulators – current PE and FY21-23 EPS is considered.
APAR INDUSTRIES
Apar’s subsidiaries
What are subsidiaries of Apar involved in?

Petroleum Specialties Pte Limited (PSPL)
Country of Incorporation: Singapore
Description: Trade of Petroleum based products and general wholesale trade,

including imports and exports.
Petroleum Specialities FZE (Subsidiary of PSPL)
Country of Incorporation: United Arab Emirates
Description: Manufactures and markets Petroleum based Speciality products, and

varieties of Oil, Lubricants and Chemicals.
Apar Transmission & Distribution Projects Private Limited
Country of Incorporation: India
Description: Engaged in the business of transmission, distribution, installation,

stringing, re-stringing, etc. of conductors, optical fibre ground wire (OPGW) and
cables.
Apar Distribution & Logistics Private Limited
Country of Incorporation: India
Description: To carry on the business of transportation and warehousing including

bonded warehousing, act as agent for shipper and to carry on business as selling
agents, buying agents, factors, carriers, Jath merchants, landing clearing and
forwarding agents, commission agents, distributors and stockiest, brokers and to
carry on the business of tour and travel operators and to act as customs agents,
wharfingers, landing agents, stevedores and longshoremen, etc.
CEMA wires & cables INC, US
Country of Incorporation: State of Delaware, US
APAR INDUSTRIES
Description: To carry out the trading business in cables & wires and/or other
products including warehousing/storing activities.
Management overview
Kushal Narendra Desai - Chairman, Managing Director and Chief Executive Officer
Mr Desai is the Promoter, Chairman, Managing Director, and Chief Executive Officer
of Apar. He holds a bachelor’s degree of science in engineering (electrical
engineering) from the University of Pennsylvania and a BS in economics from the
Wharton Business School of University of Pennsylvania.
Chaitanya Narendra Desai – Managing Director
Mr Desai is the Promoter and Managing Director of Apar. He holds a bachelor’s

degree of science in engineering (chemical engineering) from the University of
Pennsylvania and a BS in economics from the Wharton Business School of University
of Pennsylvania.
Rajesh Narayan Sehgal – Independent Director (Non-Executive)
Mr Sehgal is the Independent Director (Non-Executive) of Apar. He holds a BSc in

physics from University of Bombay and a PGDM from XLRI, Jamshedpur. He is also a
Chartered Financial Analyst with the Institute of Chartered Financial Analyst, US.
Nina Pradip Kapasi – Independent Director (Non-Executive)
Ms Kapasi is the Independent Director (Non-Executive) of Apar. She is a qualified

Chartered Accountant with the Institute of Chartered Accountants of India.
Rishabh Kushal Desai – Non-Executive (Non-Independent Director)
Mr Desai is the Promoter and Non-Executive and Non-Independent Director of Apar.

He holds a bachelor’s BS from Babson College, Wellesley, Massachusetts.
Kaushal Jaysingh Sampat - Independent Director (Non-Executive)
Mr Sampat is the Independent Director (Non-Executive) of Apar. He holds a BCom

from University of Bombay and an MBA from Bowling Green State University, Ohio.
Nirupa Kiran Bhatt - Independent Director (Non-Executive)
Ms Bhatt is the Independent Director (Non-Executive) of Apar. She holds a bachelor's

BSc from University of Bombay, Mumbai.
APAR INDUSTRIES
Additional Data
Management Holdings – Top 10*
Chairman/Joint MD/CEO Kushal Desai % Holding % Holding
HDFC Asset
Joint MD Chaitanya Desai 3.52 Vanguard group 1.49
Management
CFO Ramesh Iyer DSP Investment
2.74 IDFC Mutual fund 1.30
Managers
Sr Pres: Business Strategy &
Vijay Kumar Bajaj M Nippon Life India AM 2.72 ABRDN 1.17
Innovation/COO
Axis Asset Invesco Asset
2.38 1.00
Pres: Strategy & Projects Suyash Saraogi Management Management
L&T Mutual Fund 1.71 Blackrock 0.66
*Latest public data
Recent Company Research Recent Sector Research

Date Title Price Reco Date Name of Co./Sector Title
Margins lights up result; guidance
NA NA NA NA 08-Apr-24 TRIL
raised; Result Update
Engineering and Rich valuations bake in high
04-Apr-24
capital goods OE/execution; Sector Update
Rising like a phoenix: Turnaround
12-Mar-24 TRIL
begins; Initiating Coverage
Rating and Daily Volume Interpretation

9000 4000000
7200 3200000
5400 2400000
(INR)
(Mn)
3600 1600000
1800 800000
0 0
Apr-21
Jun-21
Apr-22
Jun-22
Apr-23
Jun-23
Aug-21
Aug-22
Aug-23
Dec-21
Feb-22
Dec-22
Feb-23
Dec-23
Feb-24
Oct-21
Oct-22
Oct-23
Volume Apar
Source: Bloomberg, Nuvama research
Rating Rationale & Distribution: Nuvama Research

Expected absolute returns
Rating Rating Distribution
over 12 months
Buy 15% 195
Hold <15% and >-5% 64
Reduce <-5% 20
APAR INDUSTRIES
DISCLAIMER
Nuvama Wealth Management Limited (formerly Edelweiss Securities Limited) (defined as “NWML” or “Research Entity”) a company duly incorporated under the Companies Act, 1956 (CIN
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India Equity Research Engineering and Capital Goods April 19, 2024

 Growth drivers/outlook: India’s transmission grid shall require ~INR2.4tn capex

 Competition: Apar enjoys 50–60%-plus market share in the conductor’s space

Subhadip Mitra Vijay Bhasin Sushil Dhoot

Important Ratios (%) Free Cash Flow (INR mn)

Assumptions (%) Key Ratios

Valuation Metrics Valuation Drivers

Conductors Speciality Oils & Power/Telecom

Source: Company, Nuvama Research

52% 48% 45% 51% 47% 48% 48% 47%

Conductors % mix Oils % mix Cables % mix

Source: Company, Nuvama Research

Higher exports and premium products’ sales mix lifted OPMs

Exports Mix (%) EBITDA Margin (%)

Source: Company, Nuvama Research

RoE versus RoCE (%)

36.0 30.8 29.1

ROAE (%) ROACE (%)

Source: Company, Nuvama Research

Valuation snapshot across electrical equipment supply chain

Equities 2Y fwd. consensus PE EPS CAGR (FY24-26E)

Macro growth drivers, industry overview

 RE power generation: String cables, LV cables, Nacelle wiring, torsion cables,

 Power transmission (grid, sub-station): Transformer oil, CTC conductors, PICC

 Market leader in supply of conductors for Indian railway electrification and

 Offering complete range of specialised cables that goes into infrastructure

 Full range of lubricants for industrial applications across hydraulic, compressor,

 Turnkey solutions in transforming India’s transmission lines with HTLS

India’s transmission capex enters new leg of upcycle

Source: Company, Nuvama Research

Source: Company, Nuvama Research

Renewables capex to spur next cycle of T&D capex (inter-state)

Thermal Capacity Renew Capacity Green Hydrogen T&D Capex (INRbn)

Source: CEA, PGCIL, Nuvama Research

Source: CEA, Nuvama Research Source: CEA, Nuvama Research

Upcoming transmission capex cycle expected to dwarf previous cycle (FY24–30E)

INR2,400bn-plus central capex by FY2030E

52 58 65 72 175 175 175

Source: PGCIL, PFC India, CEA, Nuvama Research

PGCIL’s capex to grow 3x, assuming 40% share of INR2.4tn capex

Source: PGCIL, Nuvama Research

Source: IEEMA, Nuvama Research

respectively. Railway authorities are targeting full electrification of the network

 Increased multilateral investments in power transmission projects: Multilateral

Source: Crisil MI&A, Company, Nuvama Research

Market shifting towards premium products

Market Size Growth Rate Market Volume Growth Rate

Source: IEEMA, Crisil MI&A, Company, Nuvama Research

Railway electrification drives growth over past few years

Source: Crisil MI&A, Company, Nuvama Research

Power & telecom cables

Development Association (IDA) and the International Bank for Reconstruction

 Demand for C&W expected to grow exponentially from RE sector due to

 Favourable government power distribution schemes: The domestic power

 Entry of private players in T&D space: At present, private sector participation in

 Healthy construction investments in building segment: CRISIL MI&A estimates

Indian C&W market projected to grow at 12.4% CAGR from FY23–26E

1,000 2.1% 1.8% 2.7%

Source: CRISIL MI&A, Company, Nuvama Research