Stock Snapshot
Price Performance
Recommendation Rationale
Favorable growth outlook supported by strategic restructuring and strong revenue targets.
Basis of our Recommendation
Astral Ltd is undergoing a strategic restructuring through a demerger, aiming to enhance operational focus and drive growth in its plumbing and chemicals segments. The company projects significant revenue growth, particularly in the adhesives segment, supported by new product launches and backward integration initiatives. However, challenges remain, including low margins in the paints business and execution risks associated with the demerger process.
Why We Like This Stock
- Significant revenue growth projected in the adhesives segment, targeting INR 50 billion over five years
- Backward integration of CPVC resin expected to enhance profitability and capacity utilization
- Demerger expected to unlock value and improve operational efficiency
Things To Watch Out For
- Execution risks associated with the demerger process
- Low margins in the paints business and historical underperformance in the UK market
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 5,641 | 5,832 | 6,569 | 7,572 | 8,724 |
| Profit Before Tax (Cr.) | 716 | 679 | 708 | 902 | 1,116 |
| PBT Margin | 12.7% | 11.6% | 10.8% | 11.9% | 12.8% |
| Net Profit (Cr.) | 547 | 505 | 517 | 656 | 812 |
| EPS | 20.3 | 19.0 | 19.3 | 24.4 | 30.2 |
Company Overview
Show Company Profile
Astral Limited engages in the manufacture and marketing of pipes and fittings, water tanks, and adhesives and sealants in India and internationally. It operates in two segments, Plumbing, and Paints and Adhesives. It offers plumbing pipes and fittings, sewerage and drainage pipes and fittings, agriculture pipes and fittings, cable protection system, industrial piping system, fire protection system, urban infrastructure, ancillary products, and column pipe; and roto moulding, blow moulded, loft, and anti-viral copper shield water tanks. It also provides bath-ware products comprising faucets, sanitarywares, cisterns, and showers; paints, such as interior and exterior emulsions, distempers, enamels, and primer and wall putty undercoats; adhesives and sealants, including epoxy, PVA, rubber, anaerobic tapes, silicone, acrylic, hybrid, instant, solvent, specialised, industrial adhesives, and epoxy putty; specialized valves, such as compact true, single union, and industrial ball valves; construction chemicals comprising bathroom and basement waterproofing, tile adhesives and grouts, exterior roof and wall coatings, polymers and integral compounds, and repair products; and infrastructure products comprising drainage, cable protection, and PT duct systems; and specialised fittings, such as electrofusion, compression, PPR fittings, integrated and mechanica clamp, integrated composite strap-on saddles, PVC conduit for concealed wiring system, and investment castings. The company was formerly known as Astral Poly Technik Limited and changed its name to Astral Limited in April 2021. Astral Limited was incorporated in 1996 and is headquartered in Ahmedabad, India.