Astral Ltd. share price target

On a consolidated basis, Revenue/EBITDA/PAT for the quarter grew by 10.1%/20.7%/11.9%

Astral Poly Technik (ASTRA) Q2FY21 numbers were above our estimates on revenue front and profitability front. Volume growth of 2.2% YoY and 62.4% QoQ in pipe segment as end markets opened up and company had inventory ready and robust distribution network. Pipes business showed a positive growth YoY from Sep'20 onwards. Adhesive segment from the month of July showed a positive growth after a subdued previous quarter. Margins on a full year showed growth as structural changes of eliminating stockists was undertaken....

Astral Poly Technik's (ASTRA) consolidated revenue grew 10% YoY in Q2FY21, aided by 31% growth in the adhesives segment whereas pipes grew 4% (volumes up 2%).

On a consolidated basis, Revenue/EBITDA/PAT for the quarter de-grew by 33.4%/41.7%/57.7% which above of our estimates.

Astral Polytechnik reported a relatively tepid Q1, with revenue down to Rs 404 cr (33% YoY decline) as the company sold 21784 MT pipes (?31% YoY against our expectations of almost 50% decline). We retain SELL rating on Astral Poly with target price of Rs 758/-.

Piping segment demand recovery was led by semi urban, rural areas that were less impacted by pandemic. Astral recovered ~90% of piping sales volume in May-July 2020 despite nominal sales from metro regions. Further, opening of metro regions coupled with its plan to enhance dealer networks across semi urban and rural regions would help in a faster sales recovery from H2FY21E onwards. On the adhesive side, the demand recovery was impressive post ease in restrictions with ~26% sales growth in July 2020. Low base and completion of its distribution realignment strategy yielded a...

Astral Poly Technik's (Astral) Q1FY21 result was better than our estimates on net sales and EBITDA, while PAT was a big beat owing to lower tax outgo. Net sales declined by 33.4% YoY to Rs4bn, EBITDA was down by 41.7% YoY to Rs543mn and adjusted PAT was lower by 57.5% YoY to Rs203mn. The company's piping segment started operation from first week of May, while adhesive segment resumed operation from second half of May. Lower production and nationwide lockdown weighed on Astral's Q1FY21 performance. However, on a positive note, plastic pipes/adhesives were operational at 95%/90% capacity respectively in July. The management's prudent strategies on new...

Astral Poly Technik's (ASTRA) Q1FY21 consolidated revenue declined at a slower pace than expected, posting 33% YoY contraction as the lockdown induced a 31% drop in pipe volumes.

We initiate coverage on Astral Polytechnik with a SELL recommendation and price target of Rs 758/-. India's Real Estate (esp. residential) was struggling prior to Covid-19 and has been further pushed to brink due to Covid-19 induced circumstances, viz., migration of labourers