Apar Industries Limited has secured a strategic foothold in Saudi Arabia after its wholly owned subsidiary, Apar Industries Middle East Limited (KSA), signed a base oil supply agreement with Saudi Aramco Base Oil Company (Luberef) at the lubeHub Value Park in Yanbu.
The agreement enables the subsidiary to manufacture transformer oils and specialty oils locally in Saudi Arabia, strengthening Apar’s presence in one of its key export markets and addressing supply chain challenges that affected margins in recent quarters.
#### Agreement with Luberef
Luberef, Saudi Aramco’s base oil subsidiary, announced on June 22, 2026, that it had entered into a supply agreement with Apar Industries Middle East Limited.
The agreement provides localized access to base oils—the primary raw material used in transformer oils and specialty lubricants—through the lubeHub Value Park, a dedicated lubricants cluster designed to support Saudi Arabia’s downstream industrial ecosystem and increase local content.
Apar disclosed the development to stock exchanges through Company Secretary Sanjaya Kunder.
#### Supply disruptions hit the oil business
The move comes after a difficult period for the company’s oil division.
During the Q4 FY26 earnings call, management said disruptions in the Middle East had severely affected petroleum supply chains. Refinery contract volumes were reduced and freight costs rose sharply, hurting export profitability.
The company reported that:
- Shipments to Saudi Arabia and Kuwait were absent during March and April 2026.
- Export margins came under pressure due to higher logistics costs.
- Supply disruptions affected the oil segment’s profitability.
Management noted that Luberef’s Yanbu refinery continued to meet Apar’s supply requirements even during the peak of the disruptions.
By sourcing base oils locally, the company expects to reduce logistics risks and improve supply stability.
#### Positioned for Saudi power infrastructure growth
Beyond supply security, the agreement gives Apar a stronger position in Saudi Arabia’s expanding power sector.
The company said it is the principal and sole supplier of HVDC transformer oil to all three major transformer manufacturers operating in the region:
- Hitachi Energy
- GE
- Siemens
According to management, material awards related to HVDC projects are expected during FY27 and FY28.
Local production is expected to:
- Reduce landed costs.
- Support compliance with Saudi Vision 2030 local content requirements.
- Improve competitiveness in upcoming tenders.
- Lower exposure to freight-related margin pressures.
#### Financial performance
On a consolidated basis, Apar Industries reported record results in FY26.
| Particulars | FY26 | FY25 |
|---|---|---|
| Revenue | ₹22,902 crore | ₹18,571 crore |
| EBITDA | ₹2,067 crore | ₹1,680 crore |
| EBITDA Margin | 9% | 9% |
| Net Profit | ₹977 crore | ₹821 crore |
| PAT Margin | 4.3% | – |
Revenue increased 23.3 percent year-on-year, while net profit rose 19 percent.
Oil division performance
The oil business lagged other segments during the year.
- Segment revenue rose 6 percent to ₹5,373 crore.
- EBITDA per kilolitre declined 3.3 percent to ₹5,943, compared with ₹6,145 a year earlier.
Management attributed the decline primarily to supply chain disruptions and elevated freight costs during March and April 2026.
#### Outlook
With a localized raw material supply arrangement now in place and demand from Saudi Arabia’s HVDC projects expected to rise over FY27 and FY28, the agreement could help the oil division improve margins and strengthen Apar’s position in the Middle East.
TL;DR
Apar Industries’ Saudi subsidiary has signed a base oil supply agreement with Saudi Aramco’s Luberef at Yanbu’s lubeHub Value Park. The deal allows local production of transformer oils, reduces supply chain risks, and positions the company to benefit from Saudi Arabia’s expanding power infrastructure market.
AI Summary
- Apar’s Saudi subsidiary signed a base oil supply agreement with Luberef.
- Local sourcing aims to reduce logistics and supply chain disruptions.
- The company supplies HVDC transformer oil to Hitachi Energy, GE and Siemens.
- HVDC project awards are expected during FY27 and FY28.
- The oil segment faced margin pressure in FY26 due to higher freight costs.