We met the management of Astral Poly Technik (ASTRA) at their annual analyst meet. Following are the key takeaways:
Outlook & Valuation
We remain constructive on the growth prospects of ASTRA, given its leadership position in the CPVC pipes space, proven managerial and innovation capabilities in the pipes market and significant ramp up in the adhesives segment. Its twin engines would ensure sustainable growth over the medium-to-long term and management is ahead of time in investing in management bandwidth to steer the same. We believe ASTRA will continue to gain market-share across both its segments and thus expect higher valuation multiples to sustain. We maintain OP (TP Rs1,334/47x FY21E EPS) and every weakness should be bought in.
Astral Poly Technik Limited is engaged in the production of plastic products. The Company and its subsidiaries are engaged in the business of manufacturing and trading of pipes, fittings and adhesive solutions. Its product range includes pipe category for plumbing, industrial, drainage, fire protection, agriculture, electrical conduit and ancillary, and adhesive category for construction, maintenance, wood care and automotive. The Company has its manufacturing facilities in India and abroad, and sells across the globe. Its pipe manufacturing facilities offer products, such as chlorinated polyvinyl chloride (CPVC) piping system for plumbing, industrial and fire protection; unplasticized PVC (UPVC) piping system for plumbing; manholes/chambers; PVC piping system for drainage; electrical conduit pipes; cyanoacrylates; solvent cements; tile adhesives; silicone sealant; putty; construction chemicals; polyurethane; acrylics; silicone sealants; waterproofing solutions, and silicone tapes.
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