Astral Ltd. share price target

In our view, Astral (ASTRA) stock appears well positioned to gain (in absolute term) in the immediate near term as volumes are expected to pick-up in pipe segment (from Q3) and also margins are likely to normalise (in Q4FY23E) as PVC prices have stabilised (post ~34% decline in FY23-TD).

We recently interacted with the management of Astral Ltd (ASTRA) and following are the key takeaways: a) Demand trend in pipe has improved QTD and is likely to remain healthy in H2FY23.

Astral reported Q2FY23 consolidated revenue decline of 2.4% YoY (3-year CAGR of +20%) on a high base with plumbing segment revenue declining 10.6% YoY, while adhesive segment grew 9.8% YoY.

We recommend a BUY with a TP of Rs 2,225 with an upside potential of 11.2%.

Astral Ltd reported better than expected consolidated revenue growth of 73.1% YoY (3-year CAGR of 26%) on a low base with its plumbing/adhesive segments witnessing growth of 73.8%/45.2% YoY respectively.