Astral Ltd. share price target

We met the management of Astral Poly Technik (Astral) to discuss 1) Domestic pipes industry and competitive landscape in PVC and CPVC pipes, 2) Astral's adhesive segment and growth levers, 3) Outlook on sales and margins improvement, 4) Capacity expansion plans in near future, and 5) Further expansion in allied products through inorganic expansion, if any. Astral is a leading player of domestic organized pipes industry and over the years it has established itself as a complete plumbing solutions provider. The company's innovative and superior products offerings, pan India distribution network, strategically located plants and focus on branding are major...

The reported sales of Astral Poly Technik Ltd. (ASTRAL) have grown 7.8% YoY (8.6% below our estimate) to INR 678cr.

Astral reported consolidated revenue growth of 9% YoY in Q2FY20 slightly lower than our estimate mainly on account of a decline in revenue of adhesive segment by ~10% YoY. However, piping segment (standalone) recorded strong revenue growth of 14% led by volume growth of ~17% YoY (including Rex, volume growth was higher at 27% YoY). The strong volume growth came on the back of strong demand of CPVC, PVC pipes along with ~8% YoY price hike in the CPVC pipe category. The management guided for strong volume growth in the piping segment (I-direct estimate:...

Astral Poly Technik's (ASTRA) consolidated revenue grew 8.5% YoY in Q2FY20, aided by piping segment volume growth of 27% (~17% ex-Rex Poly).

India Economic Outlook: Lower rates, liquidity to drive cyclical recovery. Plastic Products: Anti-dumping duty on CPVC Astral Poly a key beneficiary

India's finance ministry has imposed provisional anti-dumping duty (ADD) on CPVC resin/compounds imported from China and Korea for a period of six months starting 26 August.

The company's focus on capacity expansion in piping segment, ramping up capacity utilization in adhesive segment and restructuring of distribution network would be key growth levers for Astral. The company's overseas operations at UK, USA and Kenya are seeing traction and are expected to grow at healthy double digit in volume terms. We forecast net sales/EBITDA/PAT to grow at a CAGR of 19%/20.7%/27.1%. Maintain HOLD...

The company reported robust standalone revenue growth of 26% YoY (excluding Rex) led by 28% volume growth in Q1FY20. Volume growth was mainly driven by increase in distribution network, strong demand of CPVC and agriculture pipes. The company's Rex business recorded revenue of | 40 crore, which was below estimates. The company incurred a loss of one month sales, mainly due rationalisation of distribution network and streamlining of Rex line with Astral (change in GST number, implementation of SAP). On the adhesive front, muted topline growth is attributable to...

Astral Poly Technik Ltd. (ASTRAL) reported sales of INR 607cr grew by 27.2% YoY (4.4% above our estimates).

Margins impacted due to RM volatility. Story remains intact. Maintain BUY Astral Poly Technik (ASTRA) Q1FY20 numbers were in line with estimates on revenue and profitability parameters. Piping segment (including Rex) reported volume growth of 41.2% YoY and revenue growth of 37% YoY. Adhesive segment reported flattish growth due to few structural changes in Resinova, which will be corrected in current quarter and management has guided for double digit growth for FY20. Margins got impacted due to inventory losses of approx. ` 70-80 mn. We believe that inventory losses...