Astral - Demand Trend To Improve In H2 FY25: ICICI Securities

ICICI Securities Report

We interacted with Astral Ltd.'s management. Key highlights:

Demand in pipe market was muted in July–Aug 2024 due to volatility in PVC prices. However, now, with PVC prices having stabilised and Add on CPVC announced, an uptick in demand is envisaged Sep-24 onwards.

Thus, overall, Q2 volume growth should be in high single-digit to low double-digit. Management expects -

1. H2 FY25 to ameliorate notably and maintains guidance of more than 15% YoY pipe volume growth for FY25.

2. Q2 pipe margins may see a slight dent due to PVC prices falling sharply in Q2 FY25–TD; however, for full the year, Astral believes 16–18% margin, as guided, is achievable.

3. Adhesives business is growing steadily and on track to achieve 15–20% revenue growth for FY25.

4. Margins in adhesives should improve QoQ due to benign raw material prices and some improvement seen in its UK subsidiary.

Maintain Hold; June-25E target price of Rs 1,956 unchanged.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.