Buy Astral Poly Technik; target Rs 432: Maximus Securities

Maximus Securities is bullish on Astral Poly Technik (APTL) and has recommended buy rating on the stock with a target price of Rs 432 in its November 2, 2012 research report.

The net sales have increased by 52% to Rs 152.66 crs. The volumes grew by 42% to 10789 MT. The OPM has increased by 58 basis points to 13%. The net profit increased by 60% to Rs 11 crs due to top line growth from Rs 100 crs to 152 crs. Management expects capex of about Rs 45-50 crs for FY2013 & overall the company continues to expect sales growth of around 25-30% for FY2013. A total of about Rs. 68 crs has been incurred during FY2012 which includes capex for the Bendable pipe machine. This capacity of about 66,596 MT, is sufficient to generate sale of around Rs 1,000 crs. The company has 3 plants in India now, one in Himachal Pradesh where it has 3 more years left for tax holidays and another 2 in Gujarat. One plant in Gujarat at Salej is dedicated for clear water related pipes and the other one at Dholka is dedicated for sewage, wastage and drainage related pipes. Astral has commenced the commercial production of bendable pipes first time in the world with the technical support of Lubrizol during May'12. Lubrizol has exclusivity of this technology for about 20 years. In terms of its peers, APTL has shown edge in terms of constant CAGR growth in Sales & PAT of 40% & 30% respectively despite being less diversified, more vulnerable to Forex depreciation & rising crude prices. At CMP of Rs. 342, stock is trading at P/E of 18, we recommend BUY on APTL with target price of Rs. 432 (18.0x FY13EPS). Public holding more than 90% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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