Buy Astral, target price Rs 2295: ICICI Securities

ICICI Securities has buy call on Astral with a target price of Rs 2295. The current market price of Astral is Rs 1954.6.

Astral, incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 39503.03 Crore) operating in Plastics sector.

Astral key Products/Revenue Segments include Plastic Products and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 1185.10 Crore, down -3.20 % from last quarter Total Income of Rs 1224.30 Crore and up 1.98 % from last year same quarter Total Income of Rs 1162.10 Crore. Company has reported net profit after tax of Rs 75.00 Crore in latest quarter.

The company’s top management includes Mr.Sandeep P Engineer, Mrs.Jagruti S Engineer, Mr.Girish B Joshi, Mrs.Kaushal D Nakrani, Mr.Viral M Jhaveri, Mr.C K Gopal. Company has S R B C & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 20 Crore shares outstanding.

Investment Rationale
The brokerage is of the view that Astral (ASTRA) stock appears well positioned to gain (in absolute term) in the immediate near term as volumes are expected to pick-up in pipe segment (from Q3) and also margins are likely to normalise (in Q4FY23E) as PVC prices have stabilised (post ~34% decline in FY23-TD).

Additionally, with correction in adhesive input prices like VAM (down ~49% in FY23-YTD), margin in this business should also normalise (to ~15-16% in Q4FY23E). The brokerage has BUY rating on the stock with 12-month target price of Rs 2,295.

Promoter/FII Holdings
Promoters held 55.85 per cent stake in the company as of 31-Dec-2022, while FIIs owned 16.07 per cent, DIIs 15.1 per cent.