One off events impact profitability. Story remains intact. Maintain BUY. Astral Poly Technik (ASTRA) Q4FY19 results were lower than our estimates on profitability parameters. The profitability was impacted, due to one-off events, such as inventory loss (in both divisions pipe and adhesive) and the Rex acquisition. We believe that inventory losses will be reversed to a large extent, as PVC prices have trended upward in 1QFY20. As the Rex acquisition cost is already reflected in the balance sheet, profitability should improve from the current level. The piping volume grew 23% YoY...

Astral Poly Technik's (Astral) Q4FY19 result was largely in-line to our forecast. Revenue grew by 19% YoY to Rs7.7bn. While EBITDA remained flattish on a YoY basis at Rs1.2bn owing to higher other expenses, Adj. PAT declined 13% YoY to Rs611mn. Plastic segment (Inclusive of Rex) witnessed volume growth of 23% YoY to 38,877mt whereas EBITDA just grew by 9.7% YoY to Rs977mn owing to higher expenses. Further, Adhesive business revenue increased by 19% YoY to Rs1.8bn while EBITDA declined by 22% YoY to Rs250mn due to higher branding expenses. We largerly keep our estimates unchanged and introduce FY21 financials and expect its revenue/EBITDA/PAT to see a...

Astral's consolidated revenue growth of ~24% YoY in Q3FY19 was led by consolidation of Rex Polyextrusion (Rex) in the topline. Piping and adhesive segment recorded revenue growth of ~14% and ~15%, respectively. Piping segment volume growth at ~4% YoY was impacted by liquidity issue and systemic corrections (like channel financing and installation of billing software). On the adhesive segment, Resinova (domestic business) recorded slow revenue growth of 7% YoY on account of a high base...

Astral is engaged in the business of manufacturing and marketing of PVC and CPVC plumbing systems for residential as well as industrial applications. It has also ventured into adhesives category in 2014 by acquiring Resinova and Seal It (UK and USA). Astral is expanding capacities in both pipes & fittings and adhesives which will help the company in capturing incremental demand and also aid in reducing logistics cost. Implementation of GST will provide an edge to organised players (market share of 60%/70% in pipes/adhesives) like Astral due to its strong distribution network and widespread geographical presence leading to market share gains....

ICICI Securities Ltd | Retail Equity Research Astral Poly came out with a strong set of numbers in H1FY19 wherein revenue, PAT increased 20%, 30% YoY, respectively, led by impressive growth in the adhesive segment (revenue up 25% YoY). The piping segment revenue growth at ~12% YoY was lower-than-expected mainly due to trucker's strike, floods in Kerala and fall in PVC prices, which led to sales deferral by dealers. Despite this, EBITDA margins increased ~200 bps YoY to 15.6% due to price hike (mainly in the adhesive segment),...

Astral Poly Technik (Astral) came out with a strong Q2FY19 in line with our estimates. Revenue grew by 21.1% YoY to Rs6.3 bn, EBITDA was up 23.7% YoY to Rs944 mn and adjusted PAT was up 24.8% YoY to Rs523 mn. Plastic segment witnessed a volume growth of 4.5% YoY to 27,250mt with EBITDA growth of 27.4%. Further, Adhesive business revenue increased by 25% YoY to Rs1.5 bn while EBITDA rose by 28% YoY to Rs238 mn. We keep our estimates unchanged and expect revenue/EBITDA/PAT to clock a CAGR of 19%/20%/26% during FY18-FY20E. We maintain our TP to Rs1,037 (45x...

Astral's consolidated revenue growth of ~21% YoY in Q2FY19 was led by strong revenue growth in the adhesive segment by 24% YoY along with consolidation of revenue of Rex Polyextrusion (Rex) from the current quarter. However, standalone piping segment recorded moderate growth of ~10% YoY led by lower-than-expected volume growth of ~6% YoY. Anticipation of a price cut, strike of transporters coupled with floods in Kerala had impacted overall volume growth, especially in the PVC piping segment. The company has taken a price...

Astral Poly Technik's (Astral) Q1FY19 result came largely in line with estimates where EBITDA/adj. PAT were 6.3%/3.4% above our estimates respectively while revenue was 2.4% below expectation. Revenue grew by 17.1% YoY to Rs4.7bn, EBITDA was up 60.7% YoY to Rs779 m and adjusted PAT was up 76.8% YoY to Rs454 mn. Plastic segment saw a volume growth of 15% YoY to 22,476mt whereas Adhesive business witnessed revenue growth of 25% YoY to Rs1.4bn. Both Plastics and Adhesive business witnessed a margin expansion of 412bps and 483bps YoY respectively. We keep our estimates unchanged and expect revenue/EBITDA/PAT to clock a CAGR of 19%/20%/24% during...

Topline growth of ~18% YoY was largely supported by strong revenue growth in the adhesive segment by 23% YoY (net of excise, GST) during Q1FY19. The strong segment performance was led by launch of new products and addition of dealer's network during the period. Domestic business (Resinova) recorded revenue growth of 23% YoY while SEAL IT recorded decent growth of ~29% YoY. Piping segment revenue growth is not comparable on a YoY basis due to base period revenue being inclusive of excise and exclusive...

ICICI Securities Ltd | Retail Equity Research Astral poly Technik Ltd (APTL) has acquired 100% stake for | 147.5 crore (51% will be paid in Cash and 49% will be by exchange of APTL shares) in Rex Polyextrusion Pvt Ltd (Rex), an India based corrugated and other plastic pipe manufacture. Incorporated in 2006, Rex products range includes DWC Pipe (double wall corrugated), PVC suction and discharge Hoses, Single wall corrugated pipes suitable for underground sewerage drainage applications. The company has manufacturing plant located in...

Astral Poly Technik's (Astral) Q4FY18 result was a complete beat to our estimates. Plastic division volume grew by 10.1% YoY to 31,618mt slightly offset by lower realizations while Adhesive business revenue went up by 19.6% YoY to Rs1.6 bn. Revenue grew by 11.9% Yoy to Rs. 6.5bn, EBITDA was up by 32.5% Yoy to Rs.1.18bn and adjusted PAT increased by 34.5% YoY to Rs.702mn. Both Plastics and Adhesives business saw a margin expansion of 142bps and 693bps YoY respectively. On the back of strong result, raising EBITDA/PAT by 6.9%/8% for FY19 and 6.9%/9%...

APTL's topline growth of ~11% YoY was largely supported by strong revenue growth in adhesive segment by 20% YoY (net of excise/GST) during Q4FY18. Strong segment performance was led by launch of new products and addition of dealer's network during the period. Domestic business (Resinova) recorded a revenue growth of 21% YoY while SEAL IT recorded decent growth of ~15% YoY. Piping segment revenue growth is not comparable on a YoY basis due to base period revenue being inclusive of excise and exclusive...

Strong volume growth (28% YoY in pipes) pushed Q3 revenue up 17% YoY. However, higher promotion expenses and investments to augment distribution network hurt EBIDTA by ~Rs 150 mn, muting EBITDA growth to 16% YoY at Rs 737 mn.

New launches, addition of new dealers and a lower base resulted in strong volume growth of 28% YoY in the piping segment during Q2FY18. However, backward integration of raw materials resulted in lower realisation (fell ~11% YoY) as the company passed on the benefits to customers. On the other hand, the adhesive category posted a strong performance, led by domestic business growth of ~35% YoY owing to a lower base. The management has guided a strong recovery in the domestic business post implementation of...

Astral Poly Technik's (Astral) Q3FY18 result was largely in line with our expectation. Plastics division was propelled by 28.4% growth volume, partially offset by lower realization while Adhesive business saw a significant 30% YoY jump in revenue. Revenue increased 17.5% to Rs5.3 bn, EBITDA increased 16.1% YoY to Rs737 mn while adjusted net profit increased 24% to Rs428 mn. Astral is adding nearly 38KT of combined capacity at Rajasthan and Hosur which would start from Q1FY19. We are rolling forward our valuation to FY20 giving a new TP of Rs773 from earlier Rs685. We are upgrading the stock to HOLD from REDUCE....

Astral Poly Technik (Astral) came out with a strong result, beating our estimates, led by robust volume growth of 27% YoY in plastics segment. Adhesive business also saw a healthy 15% primarily at Resinova owing to capacity expansion. Overall EBITDA margin expanded 174bps to 14.7% mainly due to 138bps expansion in Plastics division and 62bps in Adhesive business. Consequently, EBITDA grew 35% to Rs763 mn translated into 43% growth in adjusted PAT to Rs419 mn. We are raising our TP to Rs685 from Rs642. However, due to sharp movement in stock price in recent months, we downgrade to REDUCE from ACCUMULATE....

Re-stocking of inventory at the dealer's level, new launches and addition of new dealers drove APTL volume growth by 27% YoY during Q2FY18. Additionally, backward integration of raw materials resulted in lower realisation (fell ~6% YoY) as the company passed on benefits to customers. Further, under the adhesive category where domestic business recorded strong performance, the overseas business recorded muted growth of ~2% YoY as the US plant in stabilisation mode. The management has guided a strong...

We remain positive on a long-term structural basis. At CMP, the stock trades at 52.3x FY18E and 40.3x FY19E earnings. Considering its growth rate, first mover advantage, the launch of new products with exclusivity and focus on enhancing distribution reach with brand awareness, APTL will remain on a growth trajectory. Improvement in return ratios and strong revenue growth with margin protection will enable APTL to sustain high valuations. We...

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...