India`s APL Apollo Tubes misses Q2 profit view on higher costs
India's reported a smaller-than-expected quarterly profit on Monday, as higher costs and lower steel pipes' prices offset strong domestic demand.
The steel tube maker's consolidated profit rose 35% to 2.03 billion rupees ($24.40 million) in the second quarter, but missed analysts' average estimate of 2.22 billion rupees, according to LSEG data.
Total expenses climbed nearly 16% to 43.73 billion rupees, with costs of raw materials rising 22%. That overshadowed a 10% increase in revenue, which stood at 46.30 billion rupees.
A volatile monsoon season also weighed on the prices of steel pipes, analysts said.
Its total sales volume rose 12% in the quarter.
The company's biggest segment Apollo Structural, which makes electric resistance welding (ERW) pipes - used in a variety of applications like infrastructure, construction, water and sewage projects - generated an over 10% increase in sales.
The country's ERW industry saw a boost in demand amid higher government spending on infrastructure projects, analysts said.
The company also announced the appointment of Chetan Khandelwal as the chief financial officer, effective Nov. 1. He will replace Deepak Goyal.
Shares of the company settled 1.2% lower ahead of the results. They rose nearly 25% in the quarter.
($1 = 83.2080 Indian rupees)
