Investsmart - Apar Industries Visit Note

We met the management of Apar Industries Ltd. Our initial view on the
company is positive, given a sharp growth in its high return businesses --
conductor and transformer oil -- and attractive valuation at 9X its
annualised 9MFY07 EPS.

Apar is the second largest player in the aluminium power conductor business
(contributing 43% of its total revenue), with a market share of about 25%.
The company is the largest exporter of aluminium power conductors from
India. With a surge in orders from Power Grid Corporation (PGCIL), Apar is
rapidly expanding capacity to gear up for additional demand. This is
supported by a robust order book position of Rs5.4bn

Apar's transformer oil division is the largest player, with a market share
of 50%, in this business. The division is a cash cow for the company,
generating a RoCE of 59%, contributing about 50% of its total
profitability. The company's key strength in the industry is its large
market share in the OEM market.

The company's polymer business remains the only segment which is a drag on
its overall profitability and return ratios. Apar is trying to address this
issue by setting up swing manufacturing facilities for high demand
products.

Download here