Global investment firm CLSA has maintained its buy rating on Astral Poly Technik, the plastic pipe manufacturer, with a price target of Rs 1,225 which implies 13 percent potential upside.
The company had announced acquisition of Rex Polyextrusion (a leading pipe manufacturer in the double-walled corrugated pipes space), which added a new growth dimension for the company, the research house said.
The deal gave the company a head start in the high growth and relatively less crowded plastic piping segment.
The company acquired 51 percent stake via cash (Rs 75.2 crore) with the balance through exchange of shares. Via this deal, it gets ready capacity (26,900 tonne) and distribution reach.
Ahesives operating leverage benefits will drive margin expansion, CLSA said, adding pipes business is showing steady growth.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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