APL Apollo Tubes Limited (NSE: APLAPOLLO) Q3 2025 Earnings Call dated Jan. 20, 2025
Corporate Participants:
Anubhav Gupta — Chief Strategy Officer
Chetan Khandelwal — Chief Financial Officer
Sanjay Gupta — Chairman & Managing Director
Analysts:
Sailesh Raja — Analyst
Amit Dixit — Analyst
Akshay Chheda — Analyst
Shaleen Kumar — Analyst
Rohit Singh — Analyst
Gargi Mungekar — Analyst
Devvrat Mohta — Analyst
Sneha Talreja — Analyst
Pallav Agarwal — Analyst
Bhavin Pande — Analyst
Andrey Purushottam — Analyst
Aditya Welekar — Analyst
Arpit Tapadia — Analyst
Mann Ashar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of APL Apollo Tubes Limited hosted by Batlivala & Karani Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sailesh Raja from Batlivala & Karani Private Limited. Thank you, and over to you, sir.
Sailesh Raja — Analyst
Thanks, Rayo. Good evening and thanks to everyone who have logged into APL Apollo Tubes Limited 3Q FY ’25 earnings conference call. I now let me introduce you the management participating with us in today’s earnings call. We have with us Mr. Sanjay Gupta, Chairman and Managing Director; Mr. Deepan Goyal Goyal, Director Operations; Mr. Anubhav Gupta, Chief Strategy Officer; and Mr. Chetan, the CFO.
I would now like to turn the call to Mr. Anubhav Gupta for the opening remarks followed by Q&A. Yeah, you may begin now.
Anubhav Gupta — Chief Strategy Officer
Thanks, Sailesh, and thanks B&K Securities for hosting APL Apollo for its second-quarter — its 3rd quarter FY ’25 earnings call. I welcome all the participants who have joined this call. Well, I welcome everyone with a lot of enthusiasm and excitement because it was a very critical quarter for us because of the very weak earnings in the previous quarter, wherein our profitability had declined quite significantly. But we are glad to share that quarter three has been our best quarter ever with the all-time sales — with all-time high sales volume, EBITDA and net profit.
During our second-quarter earnings call, we had promised to deliver 10% sales volume growth on a quarter-on-quarter basis and report EBITDA range of between INR4,000 to INR4,500 per ton. And we have achieved the same, but just like to highlight here that this has been only possible because of the resilient business model of APL Apollo steel tubes. The macro-environment has been very difficult since the beginning of this year due to multiple factors such as weak retail demand and slowdown in the government spending. Despite this, we have been able to achieve 20% sales volume growth for the first-nine months. Well, we were — we were well aware of the situation and our focus was to increase sales volume and skill the competition.
As you can see that nine months FY ’25 sales volume growth of 20%, which we reported and we can bet that this is higher than any other competitor or player who has been producing and selling steel pipes. This implies that you Apollo steel pipes has gained significant market-share in the overall steel pipe market, which also includes low-grade sponge iron pipes because of the transition from sponge iron to HR coil steel pipes as the prices for primary raw materials have fallen over the last three to four quarters. Going-forward, we expect sales volume to increase quarter-on-quarter, which is backed by number-one, market-share shift from sponge iron steel pipes to shortfall steel pipes where APL Apollo has a clear dominance and line market-share. Our international sales volume is also going strong with the commencement of Dubai plant.
Now that plant is operating at 58% utilization if we look at the 3rd-quarter volume. This was — this was very much there on the cards because we knew that we must-have access to cheaper steel outside India and Dubai was the perfect destination where we have access to cheap steel from Asian countries. The third factor is our focus on adjacent round pipes, which is part of the building material portfolio where we have the capacity, we have the same distribution network and these pipes go into buildings for HVAC and water piping and is part of the overall construction material portfolio, which contractors use while it’s construction. The fourth factor is the ramp-up of other innovative products from Raipur.
If we look at the expanded capacity in Raipur, which, which is 1.2 million ton, the utilization rate is 55%. It could have been higher in Q3, but because of a raw-material situation like lack of raw-material availability in Raipur from one of our suppliers, there was a loss of volume. Otherwise, this utilization rate of 55% would have been definitely better. And lastly, our penetration into Eastern market with commencement of two plants, one in Gurappur and Siliguri. Will take care of Eastern UP and Bihar Orisa belt and Siliguri plant will take care of Northeast markets where a lot of construction activity is taking place and it has been the focus area for Indian government.
Now talking about the margins, the — what levers we see are, number-one, operating leverage benefits, as we ramp-up our capacity, which today stands at around 4.3 million to 4.5 million tons and ready to reach 5 million tonne over the next one year. Right now, we are producing and selling around 3.2 million ton run-rate. So there is INR400 to INR500 per tonne operating leverage benefit what we see over the next one to two years as we utilize near 100% levels. Then value-added product mix improvement coming from our Raipur and Dubai plants, again, it gives us visibility for INR400 to INR500 per ton expansion in our EBITDA spreads. And thirdly — and thirdly is the — thirdly is the — is the — is the ongoing discounting, which we shall pull off once we see a strong demand pull-in the end-market, which right now is missing.
So we expect that Indian macro situation should improve in the coming quarters as the government starts spending. And as the monetary situation eases out, the — the retail demand should also recover in the second-half of the ongoing calendar year. So based on these factors, we are confident that we shall achieve 3.1 million to 3.2 million ton of sales volume for full-year and absolute EBITDA a slightly better than last year because there was a lot of miss on the earnings front in the second-quarter. So we are trying to make that up in Q3 and Q4. So we believe that our full-year EBITDA should be better than last year EBITDA.
Now that we are ready with a 4.5 million ton capacity going to 5 million ton over the next 12 months, so we do maintain our sales volume target of 4 million ton by FY ’26 and 5 million ton by FY ’27. The receivable capex for these new plants and to reach 5 million ton is around is around INR6 billion INR, which will be funded from internal cash flows over the next three to four quarters. If you — if you look at our balance sheet, it remains near debt zero, which is obviously backed by working capital management. Now that has been proven over many quarters. The nine-month ROE ROC look slightly depressed because of, again, a poor profitability in second-quarter, but same shall improve over the coming quarters as our earnings expand to normalized level and we ramp-up our capacities.
That’s all from our side. We are ready to take questions. Thank you so much.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] First question is from Amit Dixit.
Amit Dixit
Yeah, hi. Good evening, everyone, and congratulations for a good set of numbers and strong rebound after Q2. I have couple of questions. The first one is essentially, if I still look at your other expenses per ton, they are practically very static if I compare it with last quarter. So last quarter you highlighted that there was an element of around INR493 in terms of per ton, in terms of the discounting. What kind of discounting did we see this quarter and where it is likely to settle, let’s say, in FY ’26?
Chetan Khandelwal
Amit, there are two things. See, other expenses don’t account the discounting, okay, that gets net off in our selling price.
Amit Dixit
Okay. So what prompted the — yeah.
Chetan Khandelwal
Okay, go-ahead. Yeah.
Amit Dixit
No, no, so I’m assume then what prompted these other expenses to remain at a pretty high-level of INR4,045 a ton.
Chetan Khandelwal
Right. So if you look at the other expenses, they are around INR3.35 billion in Q3 versus INR3.1 billion in Q2, okay? This is like an increase of around INR25 crores on quarter-on-quarter basis. Right. In this, the main element if we see, one is the freight outward, which has increased by INR15 crores, right? And then power and fuel, which has gone up by INR5 crores, then of course the some miscellaneous expenses which are pertaining to the plant because plants utilization levels were going up. So, some INR10 crore INR15 crore increase in the miscellaneous expenses which pertain to the plant?
Amit Dixit
Okay, so going ahead, will it remain at the similar level or we can expect some kind of you know drop here?
Chetan Khandelwal
Yeah. So of course, see, I mean the major expenses there are freight outward and power and fuel. So they are variable, right? They would go up as the volume expands, right? But rest of the rest of the expenses like consumption of stores and spares, branding expenses, legal professional expenses and expenses, they shall, they shall remain stagnant and on per ton basis, they will come down.
Amit Dixit
Okay, understood. The second question is on EBITDA per ton for general structures. Now compared to the loss that we made last quarter, I mean, this quarter you have shown a very smart recovery. Of course, it might be due to the declining spread between HRC and Patra. So can we — I mean, it’s near INR2,000. So can we see it further expanding as we go-ahead or you think I mean most of it is done?
Chetan Khandelwal
Right. So see, I mean between Q2 and Q3, the difference is the inventory loss, which we booked of around INR2,000 per ton, right. That got and that’s why the margins are up. So going-forward, we are very aggressive in taking market-share from the ponds iron steel, right, and we are being very aggressive in the sales push. So yes, as we ramp-up the volumes, the margin in general segment should recover, but — but it will take a few quarters, right, where you see margins going up to INR2,500 or INR2,800 per ton in this specific segment.
Amit Dixit
Great. Thank you so much.
Chetan Khandelwal
Yeah, because this is a segment which directly competes with sponsor and pipe.
Amit Dixit
Got it. Thank you so much and all the best.
Operator
Thank you. [Operator Instructions] The next question is from Akshay from Canara Robeco Mutual Fund. Please go-ahead.
Akshay Chheda
Yeah. Thank you for the opportunity. Just two questions. So, Anubhav, first question is on the erupt proof products. So there at least I see that the margins are still lower. I mean, usually we used to do at least 6,500, but still we are 1,500 off and just proof. So any specific reason, is it higher competitive intensity or what is it, if you can talk about that? That is first. And secondly,, as you said that we are trying to grab market-share from the spawn giant side. So practically it competes with our commodity side products. So then in this backdrop, does it mean that the VAP improvement which we were earlier envisaging, will it happen at a slower pace versus earlier when we? Of course, your value-added products are also improving, but then if we see the overall mix, it doesn’t reflect that much. So then how should we understand this VAP improvement?
Anubhav Gupta
Akshay, I’ll address the second question first, right? See, I mean, if you look at APL Apollo, right, we have cleared two business segments. One is general, second is value-added. Now APL Apollo is a company which doesn’t have scarcity of resources, right, whether to produce a general segment products or value-added products, right? We have enough capacity for both segments. We have enough manpower to run both capacities. We have enough distribution network to sell both products and we don’t have any limitation of working capital, right? Anyways we are working on two days of working capital.
So how we see is that both of the two segments are operating separately, then there is good demand for general product because the natural transition is happening from pipes to HR coiled pipes. So we are being aggressive, right? I’m not growing my value — I’m not growing my general product sales at the cost of value-added products. Please understand that, right? I have enough capacity, enough resources to run to run value-added product portfolio. It is just that the demand at the macro side is not favoring the overall growth, right, the value-added products. And general segment is growing despite weak macro because of this transition which is taking place, right? So this is industry phenomena and we are taking advantage of it. But we are not growing at a cost of value-added products. Whenever there is macro support coming, right, and demand for our — whether it is coated products, whether it is Z, whether it is heavy structural pipes, whether it is light structural pipes, right, whenever the demand comes, you will see similar growth, right, to match general segment growth.
As far as the mix is concerned, at 5 million ton capacity, the general segment is around 1.5 million tons and the 3.5 million ton is the value-added products, right? Okay. And as you know that we do not give nameplate capacities, right? We give tallable capacities. So if the demand is more for general segment, we can produce and sell 1.6 million ton also from the same machinery, which today we say that the capacity is 1.5 million tonnes. Yeah, right? So as far as the capacity is concerned, out of 5 million ton, 1.5 million ton will be general and 3.5 million will be value-added. But yes, if demand for general is more, we can produce and sell more from the same capacity.
Akshay Chheda
Okay.
Anubhav Gupta
I hope this is clear.
And coming on question number-one on rustproof, see, I mean, right now what we do is we give — we have club two segments under rustproof category. One is pipes and second is sheets. So in pipes, we are still making INR6,000 per tonne spread. In sheet, we are making lower-margin. That’s why on blended basis, it looks at INR5,000 a ton. Yeah, because we don’t want to give too much of sensitive data, which can be seen by our competitors. So I mean, we are trying to club the segment like this quarter, we also club big and super big into heavy structural, right? So — but it’s not that my margins in galvanized pipes has come off, it’s not the case.
Akshay Chheda
Okay. Thank you.
Operator
Thank you. The next question is from Shaleen Kumar from UBS Securities. Please go-ahead.
Shaleen Kumar
Yeah. Thank you. Hi, Anu, congrats on a good set of numbers. Anu, did I hear correctly? You said that we will try to improve on the EBITDA of last year and for the full this year?
Sanjay Gupta
Hi, Shaleen. Good evening, Sanjay here.
Shaleen Kumar
Sir, capita, full-year EBITDA, can it be better than last year capita?
Sanjay Gupta
Yeah. Shaleen, I’m talking to the straightforward line. [Foreign Speech] Last year we have promised this year we do the volume of around 3.2 million tonnes. So I very confirm can do between 31.5 to 32. [Foreign Speech] Number two last year EBITDA INR1,192 crores. Are you hearing, Shaleen?
Shaleen Kumar
Yeah. Yeah.
Sanjay Gupta
[Foreign Speech] At any cost we want to cross this figure. The EBITDA from some number last year, unfortunately, we can’t do the EBITDA per ton from last year beat. But lucky, all the fronts we want to beat the number. On the absolute amount of EBITDA, on the volume basis, we want to take a growth of at least minimum 20%, maybe 26.5% [Foreign Speech]. Yeah, more than 20%, we want to take a growth and if there is in the absolute amount of EBITDA, we want to take growth. Number two, the margins per [Foreign Speech]. So in this quarter, we are trying to improve this both of the margin. 1,900 crores, 2,500 per [Foreign Speech] So it means we are targeting this quarter more than INR4,500 per ton EBITDA.
Shaleen Kumar
Okay. [Foreign Speech].
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech] I want to work on innovation, branding and cost controlling. [Foreign Speech]
Shaleen Kumar
Got it, sir. Got it. [Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
Okay.
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech] Thank you so much and congratulations.
Sanjay Gupta
[Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech] So, I don’t want. I am bullish. [Foreign Speech]
Shaleen Kumar
[Foreign Speech]
Sanjay Gupta
Thank you very much, Shaleen.
Shaleen Kumar
Congratulations, sir once again and thank you so much, sir.
Sanjay Gupta
Thank you.
Shaleen Kumar
I’ll go back-in the queue. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from Rohit Singh from Nvest Analytics Advisory. Please go-ahead.
Rohit Singh
Hi, am I audible?
Anubhav Gupta
Yeah, go-ahead, please.
Rohit Singh
Good evening, sir. Congrats for a good set of numbers. Sir, can you please comment on why this slowdown in government spending, like do you see any structural risk here like we were talking about growth. Last two quarters were also tough, but everyone was saying like economy will start recovering Q3 onwards. But now suddenly macro tailwinds are getting converted into headwind. So what’s wrong happening in this space? Can you comment on it?
Anubhav Gupta
Very tough for us to — I mean tell you the exact answer, but we also read in newspaper, etc., what everyone is or everyone must be reading that the government spending on infrastructure for the first-nine months has been below budget, right? And that is one. And second, of course, because of new government formation and the delayed budgets and delay in the release of points, that is impacting some overall demand for the construction sector. But that being said, some of the segments continue to do well. For example, railways which have been the core focus areas for the government. There is some slowdown towards the water transportation infrastructure or other segments. But — but yes, I mean everyone is hoping that with this budget, which is due over the next few days, the release of funds will start and that will give a push to the overall spending from the government side.
Rohit Singh
Got it, sir. That’s it from my side, sir. All the best for the future.
Operator
Thank you. Next question is from Gargi from Value Investments. Please go-ahead.
Gargi Mungekar
Hi, sir, thank you for the opportunity. Sir, my first question was that you, you know we buy HRC from companies and it is usually supplied at a standard size, which is then later reduced to April’s requirement via this cold milk that we have. So with respect to that, what is the standard thickness size that we buy and in cold mill, how much many reduce the sickness?
Anubhav Gupta
So Sanjay, she is asking like what is the standard size of coil thickness, which we get, right, and we have to cold hold to reduce the thickness.
Sanjay Gupta
No, we have take a different type of thickness for different type of thick material like [Foreign Speech] So we are taking all the different type of thickness with the different type of product we acquired. There is no standard method.
Gargi Mungekar
So sir, I actually wanted to ask it because in the previous calls I’ve heard that cold bowl milk because of this cold milk in Mara the cost of production reduces in terms of the products wherein the low thickness HRC is required. So what percentage of total product portfolio requires the low thickness low thickness oil and are these the products of life structures and apology.
Sanjay Gupta
Almost 30% we require for the thinner gauges.
Gargi Mungekar
And sir, entirely we are doing in-house.
Sanjay Gupta
30% material we are doing is the coal rolling.
Gargi Mungekar
Okay, sir. And as per the requirement, entirely we are doing in-house or cold in also outsourcing?
Sanjay Gupta
No, no. Slightly we are taking the South, we are now sort of supply. So our capacity is full of. So we are taking some in the south 5,000 to 10,000 tons per month, otherwise we have totally equipped with our finished product. So we are putting a plant in South also for this product.
Gargi Mungekar
Okay, sir. So this 5 million tons of capacity is there that you what percentage of the product portfolio will require the cold mill and it must say in-house and [Foreign Speech].
Sanjay Gupta
[Foreign Speech] this is depend on the market, but [Foreign Speech].
Gargi Mungekar
Okay, sir.
Sanjay Gupta
[Foreign Speech]
Gargi Mungekar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Gargi Mungekar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech] Everything is Siliguri, Ahmedabad, four new plants and some buildup [Foreign Speech].
Gargi Mungekar
Sir, second question is with respect to Shankara and HG Mart. So you with the current sales volumes, Sankara and AG Marka volume like sales, [Foreign Speech].
Sanjay Gupta
[Foreign Speech] about almost 35,000 tonnes per month.
Gargi Mungekar
[Foreign Speech]
Sanjay Gupta
[Foreign Speech]
Gargi Mungekar
Okay, sir. Okay, understood. Sir. The last question is with respect to — in previous call, [Foreign Speech] our intention to expand distribution in US, Europe and Middle-East. So sir, [Foreign Speech] and what is our competitive strength?
Sanjay Gupta
[Foreign Speech] we are doing 60,000, 70,000 tons per month. [Foreign Speech] I think February or March onwards we have a good response from the Middle-East market. And Saudi also we are now doing four to 5,000 tons per month volume or [Foreign Speech]. And, Dubai [Foreign Speech] we are extending to from 3 lakh to 5 freely there. [Foreign Speech]
Gargi Mungekar
Okay, sir. [Foreign Speech] So what is our? Is our cost of production lower or because it’s a relatively market, [Foreign Speech].
Sanjay Gupta
[Foreign Speech] From last one-and-one and a half months, [Foreign Speech].
Anubhav Gupta
The same thing what we brought to Indian markets in 2017 with introduction of BFP.
Operator
Thank you. [Operator Instructions] The next question is from Devvrat Mohta from Capital Group. Please go-ahead.
Devvrat Mohta
Thank you so much. Sanjay, congratulations on a good quarter. I had two questions. [Foreign Speech] What gives you confidence that you go from the INR350 crore EBITDA to INR400 crore EBITDA in Q4? That’s my first question.
Sanjay Gupta
[Foreign Speech]
Devvrat Mohta
[Foreign Speech] So should we work with this [Foreign Speech] EBITDA per ton as the base for FY ’26?
Sanjay Gupta
[Foreign Speech] my target is 5,000 minimum, going forward 6,000. [Foreign Speech] I’m not happy with 4,500 or 4,000 is not my aim. My aim is minimum 5,000 and going-forward 6,000. [Foreign Speech]
Devvrat Mohta
Worst case also you should be able to deliver 4,500 and [Foreign Speech]?
Sanjay Gupta
So yes, my target 4,500 going-forward, minimum target is 4,500. [Foreign Speech] We are doing our policies according to INR5,000 per tons [Foreign Speech].
Devvrat Mohta
Thank you so much. [Foreign Speech] Thank you so much.
Operator
Thank you. Next question is from Sneha Talreja from Nuvama. Please go-ahead.
Sneha Talreja
Hi, sir, good evening and congratulations on great set of numbers. Just couple of questions. On the previous participant’s question, you said discounting. [Foreign Speech] at this point of time.
Anubhav Gupta
So, [Foreign Speech] whatever trends we see in the first 20 days of the quarter, ongoing quarter, we see INR100 to INR200 per ton discounting pull-off [Foreign Speech] by our sales team.
Sneha Talreja
Okay. So currently we are around INR300 odd discounting on the channel?
Anubhav Gupta
INR300, INR350, yes.
Sneha Talreja
Understood. Secondly, just wanted to take some flavor. I know you have been mentioning one fact that HRC capacities in India are getting added up. But what-if still there is an ADD implementation? How do we make sure that the gaps will still remain? So just some comfort on this gap of Patra prices and primary prices remain?
Anubhav Gupta
So, see, I mean the logic says that even with the ADD, there will be recovery, right, not to the extent what we saw during COVID levels where HR coil prices started going above INR60,000 a ton and then Russia Ukraine were taking HR quality to INR70,000 a ton. That was the period which hit us the most, right? So whatever happens, right, at policy level, we don’t believe that the spike in steel could be to that extent.
Sanjay Gupta
Number two scenario, in the secondary type of material, we never think about this product because [Foreign Speech]
Sneha Talreja
Understood, sir. That was quite helpful. Thanks a lot, sir. All the best.
Operator
Thank you. Next question is from Pallav Agarwal from Antique Stock Broking. Please go-ahead.
Pallav Agarwal
Yeah, good evening, sir. I had a question on the realization. So this quarter on an average HRC prices did fall from the previous quarter, but we have shown our blended realization, there is an increase over the second — over the second-quarter. So any particular real reason for that is due to our value-added products for you know what has led to the better realization?
Anubhav Gupta
So if you look at our NSR, there is a stock in trade like in our cost, right, which you see. So if you remove that, then you don’t see increase in the — in the NSR. You got to see it without the increasing stock-in trade.
Pallav Agarwal
So I have to reduce the stock-in trade, whatever the purchase even from the sales to come to the blended NSR. Is that what is that?
Anubhav Gupta
That is right. That is right.
Pallav Agarwal
Okay. And is this trend — sorry, continue of external purchases because I would guess the margins over there would be lower than greenhouse products or this was more of a tactical thing or short-term in nature?
Anubhav Gupta
Can you say it again, please?
Pallav Agarwal
So I’m saying will this trend of higher purchase of stock intent stock continue because I thought that margins on us on a trading portfolio would be lower than our in-house products?
Anubhav Gupta
Trading is almost zero.
Pallav Agarwal
Yeah. Okay. So we did this because of to gain market-share or any particular logic if there was not very —
Anubhav Gupta
So this is not manufactured product. This is — this is raw-material, which gets traded, right? So 828,000 tonne for the quarter three is by manufactured volume, which we get. And you remove stock and trade from the revenue, you will get the NSR for the manufactured.
Pallav Agarwal
Okay. So basically the stock and trade was HRC, right? So not the finished trade.
Anubhav Gupta
That is right.
Pallav Agarwal
Okay. Also, in our presentation, we are mentioning we’re talking about the solar opportunity. So right now, what would be the proportion of our volumes that go into the solar pipe.
Anubhav Gupta
So there are like three products which APL Apollo manufactures today, which go into — which go into solar sector. One is from Raipur, which is our using oil, which go into the solar mounted structures for ground-mounted solar park, right? So that capacity started six months back and we have started selling specifically for the solar sector. Then there are some specialized tubes which go for the solar trackers, right? So that’s a slow-moving product. That’s a slow-moving product because you get — you need a lot of approvals from — from the consultants of the independent power producers who are installing solar crackers. And solar cracker anyways is a new product for the Indian market.
So although we have exported a lot of pipes for international crackers, but Indian cracker market is very new and it is expanding at a slower pace. And third product is our standard pipes, which go on the residential rooftop solar, right, they are replacing angles and channels. Again, we have — what we are doing here is we are educating the EPC installers, EPC contractors who go over rooftops for — at residential terraces, right, and they install small solar solar plants, right? So — so yeah, so it’s a new segment for us, but these are the three categories and we are working across all the three categories to boost volumes. Right now, the proportion is small, but over the next two, 3/4, we see good volume coming from solar segment.
Pallav Agarwal
Okay, because I think the trackout is that — is that the top tubes that we are talking about which we need approvals from —
Anubhav Gupta
That is right? So that is right.
Pallav Agarwal
Because there I think again the opportunity could be pretty big once we get the approvals in-place.
Anubhav Gupta
So of course, and again here the idea is to come up with like just not run-of-the-mill tubes, which a lot of our competitors are in the market and selling run-of-the mill tubes, right, where margins are very less and they are selling to the large players, very large conglomerates who don’t give margins, right, to their OEM vendors. So we are not talking to those large customers, we are talking to midsized customers, right, where we — we help them with the design, right? So then they are bound to buy tubes from us at our margin. Otherwise, whatever some players are in the market trying to sell solar tube, there is no margin, which any large developer will offer. Now we also tried, but we backed out because margins were like as low as INR0,000, INR3,000 a ton. There could be some freight arbitrage some players may be getting if they have their mill near to the solar part, but otherwise, it’s not a profitable segment with the large conglomerates where they have their designs and they just ask you to roll the material to make pipes.
Pallav Agarwal
Sure. Yeah. Thank you so much, sir.
Operator
Thank you. The next question is from Bhavin Pande from Athena Investments. Please go-ahead.
Bhavin Pande
Hey, congratulations on wonderful set of numbers. So sir, when we look at heavy structure as a category, even when we look at difficult quarters we had, metrics are fairly consistent. So how do we look at the demand scenario here and the customer-base that we have because it seems pretty much immune to a demand scenario in the general space?
Anubhav Gupta
We’re talking about heavy segment, right?
Bhavin Pande
Yeah, heavy and the premium products.
Anubhav Gupta
Heavy and…
Bhavin Pande
The premium products.
Anubhav Gupta
Premium products, which segment are you referring to in specific?
Bhavin Pande
Coated in Apollo deep and Apollo Galvanized.
Anubhav Gupta
Yeah, okay. So see, heavy — heavy structural tubes are definitely prone to the macro-environment because these pipes go into infrastructure projects like railway station, airports, healthcare infrastructure, et-cetera, okay. So the first-nine months have been tough in terms of demand from the infrastructure projects like any other building materials, but because of our high market-share, we’ve been able to grow this segment at 20% in first-nine months. Okay.
Then comes the Apollo Z or light structural. This is a residential product, okay, which goes into homes. This is part of our 50% of our portfolio which goes into residential homes. Now again, the demand from retail side has been weak over the last three, four quarters consistently, right? So here also, we are not getting any tailwind as such, right? We expect consumer demand to pick-up from the second-half of the current calendar year and then we’ll see good pickup in Life Structurals and Apollo. Life and Apollo Z are like maximum going into residential segment.
Bhavin Pande
Okay. And, when we look at our ability to penetrate into markets where the — the market still has not grown at — there’s no mature market like we are doing for Eastern market. So is it safe to assume that we can put up more plants wherever we feel that demand visibility is there.
Anubhav Gupta
So Eastern market, we are starting with two new plants, right? Normally — normally any company would go for one plant, right, but we being, we are straight away putting up two plants, right, one in to capture Eastern UP, Bihar and Bel,. Eastern UP and, sorry, right and then we are putting our plant in, which will take care of these type of sister states, right? So — and Banglas and some exports maybe to Burma, etc. We can keep on getting good inquiries from there. So yes, I mean, idea is to seed in these plants first with minimum investment if I mean the should be good because our market-share in that market is very low, right? And then we don’t mind expanding capacities as our plants ramp-up. That has been our strategy, right? We go slow and then we become aggressive once we see the trends for market-share gains.
Operator
Thank you. [Operator Instructions] The next question is from Andrey Purushottam from Cogito Advisors. Please go-ahead.
Andrey Purushottam
My questions have been answered. So thank you.
Operator
Thank you. We move to the next question. Next question is from Aditya Welekar from Axis Securities. Please go-ahead.
Aditya Welekar
Yes, sir, just one clarification on the residual capex. So in the last call, if I recall, it was near about INR3 billion to INR3.5 million and now it’s 5 billion. So that is for the capacity expansion. Earlier it was 5.5 million ton, now it is 5.5 million ton, right? Is my understanding correct?
Anubhav Gupta
Yeah.
Aditya Welekar
Yeah, that’s it from my side. Thank you.
Operator
Thank you. The next question is from Arpit Tapadia from IGE Family Office. Please go-ahead.
Arpit Tapadia
Yeah, hi, everyone. Congratulations on a great set of numbers. My question is, as you highlighted in your opening remarks about the scarcity of raw-material availability in our Raipur plant. So what exactly is that raw-material and how is it is and what the company is doing to mitigate the same?
Anubhav Gupta
So see that was like a minor shutdown from Tata Steel plant, which impacted our volume. So this was not a significant — this was not a significant loss, right, to the volume, which would have made us to change our strategy in-sourcing of steel. Yes, I mean, the volume could have been higher by 5,000 to 10,000 ton, right, but it is stable now from Jan onwards, it’s been pretty stable.
Arpit Tapadia
Okay, great. That’s it from my side. Thank you.
Operator
Thank you. The next question is from Mann Ashar from GrowthSphere Ventures. Please go-ahead.
Mann Ashar
Hello. Hi, sir. Good evening and congratulations for a great set of numbers. So just wanted to understand as the demand is shifting from, say, secondary pipes to HR coil pipes, how do you see narrow with HR coil pipes as a market because there are competitors emerging from that area as well and the pricing is very much similar in the market to HR coil pipes on the — so just wanted to understand your view from competition perspective of that particular segment.
Sanjay Gupta
You mean the, right? A narrow with HR coil, yeah. But there is no quality of narrow HR coil either there is HR coil or either is secondary. Whatever you say narrow wheel,, secondary, but there is only about two type of material in the market. One is primary, one is secondary.
Mann Ashar
Okay, sir. Got it. Yeah. Thank you so much.
Operator
Thank you very much. We’ll have to take that as the last question. I would now like to hand the conference back to the management team for closing comments.
Anubhav Gupta
Thanks everyone for dropping by and listening to our Q3 investor call. And thanks to B&K for hosting us. Look-forward to speak to everyone during the earnings call. Thank you so much.
Operator
Thank you. Thank you very much. On behalf of and Batlivala & Karani Private Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.