Accumulate Astral Poly Technik; target of Rs 890: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Astral Poly Technik

APTL revenue grew by 19.5% (YoY) on a consolidated basis. APTL has demonstrated significant pricing power driven by brand power. Ongoing investments in developing the brand will enable APTL to maintain pricing premium to competition. Margin expansion was there at YoY as well as QoQ basis. Astral Pipes Ltd.- a JV at Kenya, where the company has 37.5% stake, has recorded sales revenue of ` 153.7mn for H1FY18. Capacity expansion is taking place across plants which will be completed by Q1FY19 and APTL will be ready with more capacity and more line of products from FY19. The adhesive segment is doing well and is a better margin business compared to other plumbing products. With packaging changes undertaken at Kanpur plants for adhesives segment and the new plant coming up at Ahmedabad for adhesive, India business in adhesives is expected to show a growth of 20% plus.

Outlook

We remain positive on a long-term structural basis. At CMP, the stock trades at 52.3x FY18E and 40.3x FY19E earnings. Considering its growth rate, first mover advantage, the launch of new products with exclusivity and focus on enhancing distribution reach with brand awareness, APTL will remain on a growth trajectory. Improvement in return ratios and strong revenue growth with margin protection will enable APTL to sustain high valuations. We reiterate our ACCUMULATE recommendation with a TP of ` 890 to trade at 45x FY19E.

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