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Hidden Gem - Astral

ICICIdirect Research 04 Jul 2025 DISCLAIMER

Astral is amongst the top five players in the domestic organised plastic piping industry and commands a leading positioning in the CPVC pipes and fittings business in India. It also ranks second in India’s adhesives and construction chemicals. Additionally, it has diversified into Paints and Bathware businesses.

It has grown its plumbing business revenues at a CAGR of 12% over FY20-25, increasing its value market share by 250+ bps to ~8% in FY25. We estimate Astral’s plumbing volumes to grow at a CAGR of 12% over FY25-FY27E vis-à-vis estimated industry’s 9-10% CAGR, led by demand from real estate, WSS projects (water supply and sanitation), urban infrastructure and replacement demand.  

PVC prices have consolidated in the range of ₹ 80-87 per kg since Q3FY24 post a sharp run-up during FY20-FY22 and equally subsequent downfall over FY22-FY24. The consolidation of PVC prices at lower levels, anticipated implementation of BIS norms (expected in Q2FY26) and expected anti-dumping duties on PVC are expected to commence channel re-stocking, subsequently, driving volume growth for the industry in general and Astral in particular.

We expect its Plumbing business (pipes & fittings and tanks) revenue mix to lower to ~72% in FY27E from ~77% in FY20, given diversification in business. Its adhesives and paints businesses are scaling up, with domestic adhesives showing strong growth and paints poised for margin improvement.

Astral’s focus on increasing share of VAP (18% threshold margins) is expected to help achieve scale and higher margins. HPVC pipes and fittings for fire applications, PEX aluminium pipes for high end plumbing, specialized valve range and its existing VAP products (Channel and Surface drains) apart from its core CPVC products would help drive VAP share. The recent acquisition of Al-Aziz Plastics opens up new segments in water, gas, and power distribution.

We estimate its consolidated Revenues/EBITDA/PAT to grow at ~17%/20%/25% CAGR over FY2025-FY2027E. We have a Buy rating with a Price Target of ₹ 1830, valuing it at 60x P/E on FY27E EPS

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