Astral Ltd. share price target

Adhesive segment demand recovery was impressive post easing of restrictions with ~30% sales growth in Q2FY21. Low base, completion of its distribution realignment strategy yielded a better-than-expected performance. On the piping front, strong demand recovery was seen from September 2020 onwards, which continued in October as segment sales growth for September, October was as high as 30%, 85% YoY, respectively....

With outstanding performance in H1FY21, we have re-worked our estimates for the rest of the year and FY22. We have revised our estimates upwards with change in business sentiments and opening of economy, and expect the company to post Revenue/PAT growth at CAGR of 13%/20% respectively over FY20-22

Astral Poly Technik's (Astral) Q2FY21 result was ahead of our and consensus estimates on key parameters. Strong demand in plumbing pipes led to healthy sales growth, while better product mix and prudent cost savings aided EBITDA margin. Net sales improved by 10.1% YoY to Rs7.4bn, EBITDA was up by 20.7% YoY to Rs1.4bn. The company reported net profit of Rs879mn, growth of 6.5% YoY. The management guided that strong recovery in demand post a subdued Q1FY21 led to higher sales volumes in piping industry. Further, the company expects demand traction to continue in H2FY21E, supported by recovery in metros. Astral's capacity expansion plan to cater to...

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...