Buy Astral; target of Rs 2150: Sharekhan

buy

Sharekhan's research report on Astral

In Q2FY2025, consolidated earnings lagged estimates owing to lower plumbing volumes, led by a sharp drop in polymer prices coupled with weak operational performance in the U.K. adhesives business. Plumbing OPM stayed strong. Management has trimmed its plumbing volume growth guidance to 10-15% y-o-y from >15% for FY2025, while it has retained its 16-18% OPM guidance. For FY2025, Indian adhesives are likely to grow at 15% y-o-y, while the U.K. adhesives business is likely to revert to growth from FY2026 with 10% y-o-y growth. Bathware guidance stays unchanged.

Outlook

We retain BUY on Astral with a revised PT of Rs. 2,150, factoring downwardly revised estimates and valuation multiple owing to near-term demand sluggishness.

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Astral - 08112024 - khan