Hold Astral Poly Technik; target of Rs 410: Nirmal Bang

Nirmal Bang has recommended hold rating on Astral Poly Technik with a target of Rs 410, in its November 15, 2012 research report.

“Astral Poly Technik, for the quarter, revenues grew 48% YoY at Rs.201 crore on the back of 12% YoY growth in production at 10997 MT. In addition, there was liquidation of some inventory carried from the previous quarter. Company plans to add another 10000 – 15000 MT to the total capacity in H2FY13. We expect the total capacity to touch 80000 MT by FY13E.   EBIDTA margins have contracted by 108 bps QoQ while they remained flat YoY mainly due to rupee depreciation during the quarter. The price hikes taken during the quarter would have a lag effect and reflect in the coming quarters.   During the quarter the company incurred exceptional loss of Rs.5.4 crore due to changes in the exchange rates on repayment of loans. This saw lower growth of 15% YoY at the PAT level.   Company has started production of bendable CPVC pipes in October 2012 for which it has exclusivity contract with Lubrizol for about 20 years.” 

“Astral has grown by 50% YoY in H1FY13 and we expect this momentum to continue going forward. However, the stock has moved up by 26%/64% in the last 1/3 months period respectively. While we continue to remain positive about the growth prospects of the company, valuations are in par with its peer.  At CMP, the stock is trading at a P/E of 10.6x its FY14 expected earnings and we recommend investors to HOLD and buy the stock on dips for a long term perspective,” says Nirmal Bang research report.   

Institutional holding more than 40% in Indian cos  

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