Apar Industries is an electrical equipment company headquartered in Mumbai with revenue of $850 million. While it accounts for 50% of the Indian transformer oil market and 22% of the aluminum conductor market, recent financial reports show declining revenues and profits. The company has invested over $90 million in new plants but still faces challenges from the economic slowdown. Overall, Apar Industries has strong market positions but its financial performance has weakened, so further recovery may be needed before it presents a solid long-term investment opportunity.

1. Apar Industries Financial
Analysis
Submitted by: Bhavesh Gidwani

2. Overview
Sector- Electrical Equipment's
Company Mission:
-We at Apar are a Technology driven Customer focused
group of professionals firmly believing in our Company’s
vision:
“Tomorrow’s Progress Today”
Established: in 1958
Headquarter: Mumbai
Revenue: 850 Million USD

3. Economic Factor
• Apar operates in the diverse fields of electrical, metallurgical and chemical
engineering. Over the years, it has evolved into a diversified USD 850 million
conglomerate offering value added products and services in the areas of power
transmission conductors and petroleum specialty products.
• Accounts for about 50% of the Indian transformer oils market and about 22% of
its aluminium conductor market.
• Largest aluminium conductor exporter from India.

4. Compny market position

5. Comparison
within
Industry

6. Geographical
Presence
• Headquartered in Mumbai
• Production facilities located at Rabale
(Maharashtra), Silvassa (Union Territory of
Dadra and Nagar Haveli), Athola,
Umbergaon and Khatalwada (Gujarat).
• Also, Apar has a presence across about 80
countries in the Middle East, ASEAN, the
Americas, Africa, Europe and Australia.

7. Business Strategies
Outstanding service to our
Customers
Innovation, quality, and
value in our products
Creativity and teamwork in
the workplace
Respect for our Customers,
suppliers, shareholders,
employees, and community
Honesty, integrity,
transparency and fairness in
all that we do

8. Strategic
investments
to drive
growth
Strategic investments of Rs 660+ crore since FY13 for innovative/higher value
added products.
Conductors - Rs 267 crore
Commissioned Jharsuguda (Odisha) plant with 30,000 MT capacity in Sep’16, Further
shifted 50,000 MT to Jharsuguda Plant (Total - 80,000 MT) in FY18. • Proximity to
smelters, for logistical benefits; Tap into increasing generation capacity in eastern
India.
Oils - Rs 181 crore
• Port based Hamriyah (Sharjah) plant became operational in Jan’17 and became cash
positive with 50% capacity utilization in FY18. • Proximity to customers in Middle East
and East Africa. • Opens new avenues for bulk exports
Expanded T-Oils capacity and range (including 765KV & 800KV HVDC), doubled
Industrial and Automotive blending and automated packing capacity and established a
new R&D facility at Rabale.
Cables – Rs 220 crore
• Capex focused around power cables to manufacture high-voltage cables using the
latest CCV technology completed in FY18. • Successfully completed HT expansion in
Umbergaon, LT consolidation in progress in Khatalwad.

9. Financial Highlights

10. PARTICULARS MAR 2016 MAR 2017 MAR 2018 MAR 2019 MAR 2020
Net Sales 5,024.36 4,775.58 5,515.74 7,586.27 7,060.09
Total
Expenditure
4,651.37 4,340.75 5,104.43 7,099.88 6,579.96
Operating Profit 372.99 434.83 411.31 486.39 480.13
Other Income 12.36 16.72 11.18 15.37 14.30
Interest 175.03 128.65 151.54 213.88 243.61
Depreciation 37.69 43.45 49.59 60.13 79.15
Exceptional
Items
0 0 0 0 0
Profit Before
Tax
172.63 279.45 221.36 227.75 171.67
Tax 56.93 97.13 77.31 80.66 32.69
Net Profit 115.70 182.32 144.05 147.09 138.98
Adjusted EPS
(Rs.)
30.05 47.64 37.64 38.43 36.32
Profit & Loss (All Figures in Cr. Adjusted EPS in Rs.)

11. PARTICULARS MAR 2016 MAR 2017 MAR 2018 MAR 2019 MAR 2020
Equity and
Liabilities
Share Capital 38.50 38.27 38.27 38.27 38.27
Total Reserves 722.03 909.78 981.29 1,086.93 1,050.69
Borrowings 60.28 34.77 105.80 84.48 156.61
Other N/C
liabilities
36.03 51.19 40.12 47.95 29.26
Current liabilities 1,920.52 2,196.40 2,833.45 3,425.41 3,036.68
Total Liabilities 2,777.36 3,230.41 3,998.93 4,683.04 4,311.51
Assets
Net Block 397.61 467.59 544.18 603.61 742.44
Capital WIP 20.81 27.75 18.21 103.49 54.67
Investments 0.26 0.27 0.28 0.27 0.28
Loans & Advances 179.20 46.91 31.19 28.03 41.79
Other N/C Assets 1.01 0.76 2.93 3.98 3.83
Current Assets 2,178.47 2,687.13 3,402.14 3,943.66 3,468.50
Total Assets 2,777.36 3,230.41 3,998.93 4,683.04 4,311.51
Balance Sheet (All Figures are in Crores.)

12. Cash Flow

13. Management Statement
VISION 2020: 25% revenue share targeted from auto and industrial oils. Steady demand expected from the
automotive sector.
Vision 2020: 35% of revenue share from higher-value products is targeted in FY20.
Order book up 2.5x: Conductors’ order book was ` 3,020 crore on March 2019. This includes ` 571 crore of
orders for copper conductors for Railways. Export markets contributed 46% to the order book.
The domestic T&D equipment market is expected to continue to benefit from various regulatory initiatives
leading to both new and replacement demand for transformer oils.
Your Company expects revival in EBITDA levels with stable base oil outlook.

14. Management
Discussion

15. Corporate
Information
BOARD OF DIRECTORS
Mr. Kushal N. Desai Chairman & Managing
Director
Mrs. Nina Kapasi Independent Director
Mr. F. B. Virani Independent Director
Mr. C. N. Desai Managing Director
Mr. Rajesh Sehgal Independent Director
Mr. Suyash Saraogi Independent Director –
Upto 20.08.2018
Mr. Rishabh K. Desai Non Executive and Non
Independent Director – w.e.f. 7th May, 2019

17. Financial ratio calculation
Ratio
Result
Definition Interpretation
Dec. 31, 2019
Dec. 31,
2018
Stock' adjusted
price
393 660
I. Liquidity
1. Current ratio
1.14 1.20 The ability to pay short-‐term debt
The current ratio measures a company's ability to pay its
short-term liabilities with its short-term assets. A higher
current ratio is desirable so that the company could be stable
to unexpected bumps in business and economy
2. Quick test 0.80 0.80
The ability to pay short-‐term
debt immediately and without waiting for
inventory to be sold
Apar can pay it’s debt quickly.
3. Currentcash debt
coverage
0.18 0.071 The ability to pay off the company’s current
liabilities using a give year operations
It is clear that Apar Industries liabilities has increased within
the last twoyears. However, seeing the growth they will
payout soon.
II. Activity
4. Accounts receivable
turnover 89 94
Measures liquidityof receivables
Apar is working in reducing its
receivable turnover.
5.Inventory turnover 6.20 4.28 Measures liquidity of inventory
Apar Inds has an Inventory turnover ratio of 6.20 which shows
that the management is inefficient in relation to its Inventory
and working capital management.
6. Asset turnover 159.79 137.93
Measures how efficiently
assets are used togenerate sales
Apar Inds has ROA of 3.09 % which is a bad sign for future
performance. (higher values are always desirable)

18. III. Profitability
7. Profit marginon sales
1.93% 2.61%
Measures net income generated by sales
Apar Industry profit margin has been impacted from the last year
8. Return on assets
3.09% 3.60% Measures overall profitability of assets Apar Inds has ROA of 3.09 % which is a bad sign for future
performance. (higher values are always desirable)
9. Return on common stock
equity 13.07% 14.12%
Measures profitability of owners' investment ROE measures the ability of a firm to generate profits from its
shareholders investments in the company. Apar Ind has a ROE
of 13.07 % .(higher is better)
10. Earning per share 54.15 RS 50.60 Measures net income per share Earning per share is increased as compared to last year because of
higher profit
11. Price-‐earning ratio
7.2% 13.04%
Measures the ration of the stock market price to earning
per share
Price of share has been decreased because of the unseen
events(covid-19) economy had beeen hit which led to fall in share
prices as well.
12. Payout ratio
29.79% 31.98%
The proportion of earnings that is paid out as dividends
Apar has always paid its investors a good return on their investment
in 2020 till 2
nd
quarter they are giving 63% return to its holder
IV. Coverage
13. Debt to assets
0.15% 0.27%
Measures total assets provided by
creditors
Apar uses more equity for operations
14. Times interest earned
3.09% 3.60%
Measures ability to pay interest as they due Apar has a very high capacity to pay interests as they due
15. Cashdebt coverage
0.59% 0.75%
Measures the ability to repay its total
liabilities using a given year operation cash flows
The company has less operating profits which does not allow
them to pay their liabilities
16. Book valueper share 294.02 266.41
Measures the amount each share would
receive if the company were liquidated at the amounts
recorded on the balance sheet
17. Free cash flow -40.01 Cr
138.84 Cr
Measures the amount of discretionary cash flow
Apar industries is facing some cash issues because of this
pandemic which has lcreated a less cash flow in the company

19. Things to consider before Investing.
Positive
• Company has been maintaining healthy ROCE of 31.48% over the past 3 years.
• The company has a high promoter holding of 59.69%.
• Apar Inds has a PE ratio of 17.45 which is high and comparatively overvalued .
Negatives
• The company has shown a poor profit growth of -8.65% for the Past 3 years.
• The company has shown a poor revenue growth of 13.92% for the Past 3 years.
• Apar Inds has reported revenue growth of -6.94 % which is poor in relation to
its growth and performance.

20. Summary
The purpose of the presentation was to do a strategic financial analysis of
the Apar Industries to know about the current situation and Financial of
the company and to know that it is good for investment purpose or not.
Right now the company is facing lot of issues because of the upper
management as well as the economy conditions, but the company has a
high growth potential and can recover from the short term loses and
become a good Investment for long run.