Buy Astral; target of Rs 1808: Prabhudas Lilladher

Prabhudas Lilladher's research report on Astral

We downward revise Astral Ltd (ASTRA) FY25/26/27E earnings by 6.4%/9.0%/7.3% factoring in the lower volume growth guidance of 10-15% in P&F segment for FY26 and rising competitive intensity. Further, we revise DCFbased TP to Rs1,808 (Rs1,883 earlier). ASTRA reported flat volume growth in the plastic pipes segment due to delays in ADD on PVC resin prices and weak demand. However, plumbing EBITDA margin improved significantly by 195bps YoY to 18.5%, with EBITDA per kg for plastic pipes at ~Rs35. EBITDA is considered healthy given the current challenging demand environment, largely due to increase in the VAP mix and cost rationalization efforts.

Outlook

ASTRA maintained its volume growth guidance in the P&F business at 10-15% and revenue growth guidance in P&A at 15% for FY26. The company also maintained its EBITDA margin guidance at 16-18% in pipes and 14-16% in domestic adhesives. We estimate sales/EBITDA/PAT CAGR of 14.9%/16.3%/19.5% over FY24-27E. Maintain ‘BUY’.

For all recommendations report, click here