Astral Ltd. share price target

Astral Poly Technik's (Astral) Q4FY20 result was better than our forecast. While revenue came in-line with our estimates, EBITDA and PAT were higher owing to decline in raw material prices and lower tax outgo. Revenue declined by 18.8% to Rs6.2bn, EBITDA was down by 5.3% YoY to Rs1.1bn and adjusted PAT was lower by 19.3% YoY to Rs516 mn. The management has reiterated their positive stance on both businesses and is confident to overcome this crisis with improved operational efficiency. We believe impact of COVID-19 on real estate and infrastructure would dent demand for pipes in FY21E. We have cut our FY22E net sales/EBITDA/PAT estimates by -11.7%/10.6%/-14.6% respectively. Maintain BUY with a TP of Rs1,093 (from earlier TP of Rs...

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...