- 08 Feb 2023
- ICICIdirect Research
Astral reports growth in topline, profitability under pressure
ASTRAL - 1944 Change: -43.80 (-2.20 %)News: Astral's consolidated revenue grew 15% YoY to ~Rs 1268 crore led by revenue growth across its segments. Astral’s plastic piping segment reported revenue growth of ~11% YoY to ~Rs 932 crore. On the paints & adhesives front, the company recorded revenue growth of 28.6% YoY to ~Rs 336 crore. Gross margin declined ~152 bps YoY (up 245 bps QoQ) mainly due to usage of high-cost inventory. This led to an overall fall in EBITDA margin by ~322 bps YoY (up 241 bps QoQ) to 14.7% in Q3FY23. PAT came in at ~Rs 95 crore, down ~26% YoY tracking sharp fall in EBITDA as well as higher interest and depreciation costs. The company has approved bonus issue in the ratio of 1:3
Views: We believe Astral posted an encouraging performance on the revenue front. However, even though margins improved on a QoQ basis, EBITDA margin is still lower than the company's pre-Covid range of 17-18%. Higher interest cost (up 4.5x YoY) has kept PAT under pressure. We await management commentary on sustainable margin guidance going forward
Impact: Neutral