Buy Astral; target of Rs 1503: Prabhudas Lilladher

Prabhudas Lilladher's research report on Astral

Astral Ltd (ASTRA) has reported flat volume growth of 0.5% in the plastic pipe segment due to weak demand scenario and delays in ADD on PVC resin. Its plumbing EBITDA margin contracted by 150bps YoY to 16.4%, with EBITDA per kg for the plastic pipe segment at Rs 27.9 after inventory loss of Rs 250mn in Q1FY26. During the quarter, PVC prices declined by 14% YoY. However, from Q2FY26, prices stabilized, and volumes began to recover. In July’25, the company recorded a 30% YoY volume growth. We anticipate ASTRA will achieve 10.0% volume growth in its P&F business, along with a 13.6% revenue increase in its Paints & Adhesives segment in FY26. The company is also expected to maintain its EBITDA margin of >16% in the coming years. We estimate sales/EBITDA/PAT CAGR of 11.8%/13.8%/19.6% over FY25-27E.

Outlook

We downward revise ASTRA FY26/27E earnings by 10.0%/7.8%. Further, we revised DCF-based TP to Rs1,503 (Rs1,630 earlier) and Upgrade our rating to ‘BUY’ from ‘Accumulate’ due to recent correction in the stock prices.

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