Astral Q3 Results Review - One Off Items Weighed On Margins, Promising Outlook: IDBI Capital

IDBI Capital Report

Astral Ltd.’s Q3 FY24 result was below our estimate on net sales front, while margins were a miss owing to one off expenses incurred in Q3 FY24. Softening of polymer prices led to inventory loss of Rs 200 million, further dented operating margin.

Astral continued new capacity addition which would be operational in upcoming quarter. The management sounded optimistic of robust demand in piping.

Net sales was up by 8.1%YoY to Rs 13.7 billion, while Ebitda improved by 10% YoY to Rs 2 billion. The company reported net profit of Rs 1.1 billion, down by 23.8% YoY.

Astral remains our preferred pick amongst our building material products universe given its superior product mix, extensive distribution network and healthy balance sheet.

We roll over to FY26E and maintain 'Hold' with a revised target price of Rs 2,138 (from Rs 2,116), assigning 70 times price-to-earning ratio on FY26E.

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