Astral is the leader in the CPVC piping segment and expanding into the adhesive business.
Strong revenue growth, higher RM cost drags profitability.
Astral’s share price has grown by ~4.6x over the past five years (from ~₹ 367 in May 2017 to ~₹ 1750 levels in May 2022).
We value Astral at ₹ 1930 i.e. 55x P/E on FY24E EPS.
We like Supreme Industries in our coverage universe.
Q4FY22 Earnings Conference Call highlights
|Q4FY22||Q4FY22E||Q4FY21||YoY (%)||Q3FY22||QoQ (%)||Comments|
|Revenue||1,390.6||1,273.3||1,127.8||23.3||1,102.7||26.1||Price hikes in the piping segment drives topline|
|Raw Material Exp||943.2||821.3||681.2||38.5||717.9||31.4||Sharp rise in input prices and delay in passing of the same drags gross margin down by 373 bps YoY|
|Cost of traded goods||9.9||9.0||5.7||73.7||7.9||25.3|
|EBITDA Margin (%)||15.6||18.4||22.6||-698 bps||17.9||-233 bps||Savings in other costs help restrict EBITDA margin fall at 100 bps YoY|
|Profit from associates||-1.9||0.0||-0.4||NM||0.0||NM|
|PAT||144.1||153.6||176.1||-18.2||127.9||12.7||Bottomline growth was restricted at 3% as strong revenue growth was partially negated by lower EBITDA margins|
|Plastic||1,084.1||1,015.0||886.4||22.3||841.5||28.8||Segment revenue growth was largely driven by price hike. Standalone segment volume de-grew by 4.5% during Q3FY22 on higher base and lower dealer offtake|
|Adhesive||306.5||258.3||241.4||27.0||261.2||17.3||Streamline of distirbution network and focus on market share gains drives revenue growth for Q3|
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