Sharekhan's research report on Astral
Q2FY2024 consolidated revenues remained in-line, led by strong volume growth. OPMs marginally lagged led by inventory losses in CPVC and bathware segment’s losses. Net earnings rise 91% y-o-y. Management upped piping volume growth guidance on strong demand and expected bottoming out of polymer prices. It remains committed on its earlier guidance of doubling in revenues in five years. Astral is putting up three new capacities which along with de-bottlenecking at existing capacities would increase piping capacity by more than 50% by FY2026.
Outlook
We upgrade Astral to Buy with an unchanged price target of Rs. 2,170, as recent correction in stock price provides a buying opportunity, considering healthy demand outlook for the next 2-3 years.
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