ASTRAL LTD

Astral Poly Technik Ltd was established in 1996, with the aim to manufacture pro-India plumbing and drainage systems in the country. It has also forayed into adhesive business over years.

Key Business

Piping

Adhesives

Shareholding Pattern

-PUBLIC GROUP

-PROMOTER GROUP

Financial Summary

Synopsis of Financials

• Plumbing business delivering EBITDA margin of 16% in Q3 and 17% on a nine-month basis
• Indian adhesive operation showing top line growth of 17% in Q3 and 15% on a nine-month basis
• Significant volatility in polymer prices, with PVC prices dropping by 13.5% in the last quarter.
• Dealers and distributors reduced inventory levels due to uncertainty in price stabilization.
• Recent price stability observed, with an upward trend initiated in November due to increased international PVC prices and the Indian government’s antidumping duty on PVC imports.

Final Outlook

Astral Ltd. presents solid investment fundamentals with strong market leadership, healthy profit margins, and low debt. It is a consistent performer with high return ratios and strong cash flow, making it attractive for long-term investors. However, raw material costs and macroeconomic factors could impact profitability.

Strengths:

1. Market Leadership: One of the top players in the piping industry.

2. Diversified Product Lines: From piping to adhesives and infrastructure.

3. Strong Financials: Consistent revenue growth, healthy margins, and low leverage.

4. Expansion Plans: Actively expanding into new product lines like infrastructure products.

Financial Overview:

Revenue (FY23): ~INR 5,000 crore

Net Profit Margin: ~12%

ROE: 22%+

Debt-to-Equity: Low, indicating solid financial health.

The price seems to be moving within a rising channel, indicating a long-term uptrend. Currently, the price is near the lower boundary of the channel, suggesting it may either rebound from this support level or break down if further selling pressure continues.

I would give Buy recommendation for this stock