Astral Ltd. share price target

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

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