Astral Ltd. share price target

Strong volume gain in January-February wiped out in March During the first two months of Q4FY20 (i.e. January-February before the lockdown) the piping segment reported strong growth in volume, value by 19%, 17% YoY, respectively. However, volume shortfall during March 2020 (down 53% YoY due to lockdown) led the overall piping segment volume to decline ~13% YoY in Q4FY20. On the other hand, ~28% drop in revenue of adhesive segment in Q4FY20 was mainly due to ~60% revenue decline in March 2020. While major urban areas are still under partial lockdown, the...

Weekly Wrap: Global data shows world economy improving. ASTRA: Volumes hit due to lockdown, maintain REDUCE

Astral Poly Technik's (ASTRA) Q4FY20 performance was disappointing, with consolidated revenue dropping 19% YoY and pipe volumes down 13%.

Astral Poly Technik (ASTRA) Q4FY20 numbers below estimates on revenue front as last 12-14 days of March was lost due to lockdown, there was a pile up of inventory at depots and sales was lost due to logistics constraints and weakness in adhesives business and in line with estimates on operating profitability parameters. Adhesive segment margins on a full year showed growth as structural changes of eliminating stockists was undertaken. Stockist margins of 68% was removed which directly benefited the Company. ASTRA has plans for expansion and have acquired adjacent land at...

On a consolidated basis, Revenue/EBITDA/PAT for the quarter de-grew by 18.8%/5.3%/20.1% which fell short of estimates by 25.3%/16.2%/33.6%.

Our interaction with managements and dealers indicates significant prebuying activity of consumer goods during January-February 2020 on fears of supply related issues from China. While companies have secured supplies to avoid any disturbance in sales in Q4FY20, demand was negatively impacted in March 2020 owing to holiday and post that lockdown across countries. We also believe a late recovery in demand for consumer goods will also impact Q1FY21 performance due to 1) shortage of workers (due to heavy migration), 2) shift in focus on essential goods compared to discretionary products and 3) streamlining of supply chain....

The reported sales of Astral Poly Technik Ltd. (ASTRAL) grew by 5.4% YoY (3.6% below estimate) to INR 664cr.

Astral reported strong volume growth of 15% in the piping segment during Q3FY20 despite extended monsoons. The company witnessed a strong recovery in volume growth during November-December 2019. Astral has further guided at strong demand for pipes in Q4FY20 (with ~24% volume growth in January 2020) supported by market share gain (from regional, unorganised players) after the government imposed anti-dumping duty on CPVC resin import from China and Korea. We model piping segment volume CAGR of ~15% (FY19-22E) in line with management estimates supported...

We met the management of Astral Poly Technik (Astral) to discuss 1) Domestic pipes industry and competitive landscape in PVC and CPVC pipes, 2) Astral's adhesive segment and growth levers, 3) Outlook on sales and margins improvement, 4) Capacity expansion plans in near future, and 5) Further expansion in allied products through inorganic expansion, if any. Astral is a leading player of domestic organized pipes industry and over the years it has established itself as a complete plumbing solutions provider. The company's innovative and superior products offerings, pan India distribution network, strategically located plants and focus on branding are major...

The reported sales of Astral Poly Technik Ltd. (ASTRAL) have grown 7.8% YoY (8.6% below our estimate) to INR 678cr.