Reduce Astral; target of Rs 1480: HDFC Securities

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HDFC Securities' research report on Astral

We believe Astral’s foray into new businesses (paints and bath ware) will reduce its valuation premium. In Q4FY23, its consolidated revenue rose 8/19% YoY/QoQ (strong growth across both plumbing and adhesives), while EBITDA/APAT grew by 43/47%, as margin expanded across plumbing/paints and adhesives (P&A) segments by 600/410bps YoY. Astral’s Bhubaneswar plumbing plant has become operational, and it will drive volume growth in the east. The adhesive plant in Dahej is under a trial run. Astral is adding plumbing plants in Guwahati (15K MT) and Hyderabad (70K MT).

Outlook

We maintain REDUCE on Astral, as we believe its valuation is expensive, and we revise the target price to INR 1,480/sh (30x its Mar-25E consolidated EBITDA; implied P/E 50x Mar-25E).

For all recommendations report, click here

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Astral - 18 -05 - 2023 - hdfc