Buy Astral, target price Rs 2,666: Anand Rathi

Anand Rathi has a buy call on Astral with a target price of Rs 2,666. The current market price of Astral is Rs 1,805 . Astral, incorporated in 1996, is a Mid Cap company with a market cap of Rs 48387.78 crore, operating in the Plastics sector.

Astral's key products/revenue segments include Plastic Products and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 1379.20 crore, down -1.17% from last quarter Total Income of Rs 1395.50 crore and up .20 % from last year same quarter Total Income of Rs 1376.40 crore. The company has reported net profit after tax of Rs 108.70 crore in the latest quarter.

Investment Rationale
The balance sheet continues to be lean (Rs 2.7 billion cash surplus, down 50% due to capex). The Astral management expects 10-15%/15% volume/revenue growth in plumbing/paints & adhesives in FY25. Adhesive margin guidance: India 15%, overseas 8-10%; overall capex guidance: Rs 1 billion. Anand Rati expects strong 18%/22%/24% revenue/EBITDA/PAT CAGRs over FY24-27; hence, upgrade the stock to a Buy with a target price of Rs 2,666, 68.75x FY27e EPS (earlier a Hold, at a Rs 1,793 target price, 62.5x FY25e).

Promoter/FII Holdings
Promoters held 54.1 per cent stake in the company as of 30-Sep-2024, while FIIs owned 22.32 per cent, DIIs 12.48 per cent.