Buy Astral; target of Rs 2605: Anand Rathi

Anand Rathi's research report on Astral

Astral’s Q1 performance was good. Revenue/EBITDA/PAT grew 73%/ 33%/28% y/y to Rs12.1bn/Rs1.7bn/Rs961m (ARe: Rs12.6bn/Rs1.8bn/ Rs1,088m. Continuing higher input costs shaved 714bps off the gross margin y/y to 31.1%. Economies of scale led to lower contraction in the EBITDA margin, 431bps y/y, to 14.2%. Gross profit and EBITDA, though, rose respectively 41% and 33% y/y on robust revenue growth.

Outlook

We maintain our Buy on it with a higher TP of Rs2,605 (earlier Rs2,560) based on 62.5x (unchanged) FY24e earnings. Faucets and sanitaryware, when factored in, would increase the potential.

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