Building Material Q2 Results Preview - Moderate Volume Growth With Margin Contraction: PL Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..PL Capital Report.Building material companies under our coverage universe are expected to report moderate revenue growth due to weak demand and higher base, along with contraction in margins due to inventory loss in plastic pipe companies and higher timber prices in the woodpanel segment. Plastic pipe sector is anticipated to see moderate volume growth of 8.9% YoY. Further, tiles and bathware sectors are likely to experience lower growth due to weak demand and increased competitive intensity. We expect coverage companies to register sales growth of 2.2% YoY, given correction in Finolex Industries Ltd., Cera Sanitaryware and Greenpanel revenue, while Astral and Century Plyboards are likely to outperform. Driven by inventory loss in the plastic pipe segment & higher timer prices in woodpanel segment, we anticipate margin to contract by +140 bps YoY, and Ebitda and PAT to decline by 7.8% and 11.8%, respectively for coverage companies..We prefer plastic pipe companies with expected regulatory change towards PVC resin import (increase in anti dumping duty on China, Japan, USA etc. import), which will benefit large organized players like Astral and Supreme Industries and also expected heathy volume growth. Our top pick is Astral, which is likely to clock revenue/Ebitda/PAT CAGR of 19.6%/21.3%/26.3% over FY24-27E and trading at 46 times FY27E earnings (five-year average, one-year-forward PE of 62 times)..Click on the attachment to read the full report:.Automobiles Q2 Preview- Two-Wheelers To Outshine In The Medium Term; PV, CV Trends Moderating: Axis Securities.DISCLAIMERThis 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.

Building Material Q2 Results Preview - Moderate Volume Growth With Margin Contraction: PL Capital

The brokerage upward revises its target price for Kajaria / Century Plyboards / Greenpanel and upgrades its rating for Astral to ‘Buy from 'Hold'.’

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Building Material Q2 Results Preview - Moderate Volume Growth With Margin Contraction: PL Capital

The brokerage upward revises its target price for Kajaria / Century Plyboards / Greenpanel and upgrades its rating for Astral to ‘Buy from 'Hold'.’

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