CLSA initiates coverage on Astral Poly with 'buy' rating
The brokerage said the company is transitioning from a pipes manufacturer to a scalable building materials franchisee by leveraging its strong brand strength and distribution network.
By ET Bureau | Updated:
Mumbai: CLSA has initiated coverage on Astral Poly Technik with a 'buy' rating and a target price of Rs 545, citing the company's development into a strong building material franchise.
The global brokerage said the company is transitioning from a pipes manufacturer to a scalable building materials franchisee by leveraging its strong brand strength and distribution network.
"The company is now rapidly expanding into the attractive adhesives/construction chemicals business through recent acquisition of Resinova, which has helped it gain a foothold in the business. We expect Astral to report 27% EPS CAGR in FY16-19CL with sharp improvement in asset turns leading to strong RoE expansion," said CLSA.
Astral Poly has leadership position in the residential chlorinated poly vinyl chloride pipes market.
"We believe a strong EPS Cagr (27% FY16-19CL), improving FCF (free cash flow) generation and returns profile justify premium valuations," said CLSA.
On Tuesday, shares of Astral Poly ended down 1.5% at Rs 441.65 on the BSE. The target price of CLSA for Astral Poly implies an upside of 23.4% from the current level.
The global brokerage said the company is transitioning from a pipes manufacturer to a scalable building materials franchisee by leveraging its strong brand strength and distribution network.
"The company is now rapidly expanding into the attractive adhesives/construction chemicals business through recent acquisition of Resinova, which has helped it gain a foothold in the business. We expect Astral to report 27% EPS CAGR in FY16-19CL with sharp improvement in asset turns leading to strong RoE expansion," said CLSA.
Astral Poly has leadership position in the residential chlorinated poly vinyl chloride pipes market.
"We believe a strong EPS Cagr (27% FY16-19CL), improving FCF (free cash flow) generation and returns profile justify premium valuations," said CLSA.
On Tuesday, shares of Astral Poly ended down 1.5% at Rs 441.65 on the BSE. The target price of CLSA for Astral Poly implies an upside of 23.4% from the current level.
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