Astral Ltd. share price target

De-stocking of inventory at the dealer's level had dented volumes of APTL as volume growth remained flat in Q1FY18. Additionally, backward integration of raw materials resulted in lower realisation (declined ~6% YoY) as the company passed on benefits to customers. Further, under the adhesive category where domestic business was marred by lower volume offtake by dealers, the overseas business declined in sales by 5% YoY due to adverse currency movement. However, the management has guided a strong...

Structural growth story intact: Strong demand for pipes (75% of FY17 revenue) in the agri and housing sectors coupled with ~20% growth in adhesive business, as Astral expands its product suite, will continue to drive growth.

Astral Poly Technik (APTL), a leader in CPVC piping, has 25% market share with total pipe manufacturing capacity of ~1.4 lakh tonnes. Over the years, APTL created a strong brand in Indian plumbing market registering healthy piping volume CAGR of 32% in FY09-16. We believe it will continue recording strong piping volume CAGR of 17% in FY17-19E supported by demand staying intact from various government social schemes & implementation of GST. Further, addition of adhesive business in the kitty is a step to de-risk business from concentration of one product. We expect...

Strong volume growth despite demonetization; Robust performance at Resinova Plastic revenue grew by 10.7% YoY to Rs4,675 mn led by a robust 12.5% YoY volume growth to 28.7KT. Plastic division's EBITDA margin expanded significantly 377bps YoY to 16.4% in Q4FY17 as the company started its own composite plant in association with Sekisui Chemicals. Therefore, consolidated EBITDA increased 38% YoY to Rs893 mn which translated into...

performance in FY11-16 with revenue, earning CAGR of 33% and 25%, respectively. This was largely led by strong demand in the plumbing & Amount drainage segment (resulted in capacity addition at 21% CAGR in FY11-16) 6706.0 and acquisition of adhesive business....

Despite demonetization and change in Astral's raw material (CPVC pipes) tie-up with Lubrizol, revenue increased 12% led by 12% volume growth in pipes (75% of revenue) and 11% growth in adhesive division (25% of revenue). Cost savings as Astral backward integrated to make its own CPVC compound coup..

revenue/EBITDA/PAT was up 9.2%/57.2%/61.2% YoY to Rs4.5 bn/634 mn/346 mn. Plastic division's volume increased 12% YoY to 20,852mt with flattish realization growth. Adhesive business reported a strong 12% revenue growth led by strong growth at Resinova. The company started producing its own composite plant in association with Sekisui Chemicals which has resulted in lower raw material cost and higher margin. The management has guided for 15-20% volume growth from FY18 onwards with higher margin. Due to demonetization, we are cutting our EBITDA/PAT estimates by 4%/8% for FY17 and 5%/8% for FY18. We expect revenue/earning CAGR of 17%/28% in FY16-18E. We are...

Muted EBITDA performance (up 8% YoY) at Rs 565 mn in Q2 was largely due to one-off [Astral changed its raw material (CPVC pipes) supplier]. Astral backward integrated to make its own CPVC compound by using resin from Sekisui, Japan and launched its own CPVC pipe brand Astral CPVC Pro.

Astral Poly Technik Ltd. (Astral) came out with mixed results where revenue was marginally above expectation while EBITDA and PAT was a tag lower than estimates. In Q1FY17, Consolidated revenue/EBITDA grew by 16.7%/8.5% YoY to Rs5,205mn and Rs546 mn, respectively (below our estimates) while adjusted PAT (adjusting forex loss of Rs36 mn) came at Rs303 mn, up by 3.7% YoY due to higher depreciation and interest expenses. EBITDA/Adjusted PAT margin declined 98/90bps YoY to 13%/7.2% respectively due to lower gross margin and higher employee cost. The company reports strong 16% YoY growth in pipes revenue led by 21% rise in volume partially offset by 4.3% drop in realization due to lower CPVC prices. Adhesive business witnessed a growth of...