AgenciesRelated
has buy call on Astral Poly Technik with a target price of Rs 1663. The current market price of is Rs 1523.75.
Astral Poly Technik Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 30497.80 Crore) operating in Plastics sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 903.60 Crore, up 20.16 % from last quarter Total Income of Rs 752.00 Crore and up 35.61 % from last year same quarter Total Income of Rs 666.30 Crore. Company reported net profit after tax of Rs 125.10 Crore in latest quarter.
Investment Rationale
The brokerage upgrades ASTRA to BUY with the stock correcting ~27% in the last one month. Besides expecting the company to continue with its strong earnings traction post Covid, it expects its premium valuations to sustain driven by a) sustained market share gain opportunity in piping segment with likely accelerated consolidation in PVC/CPVC pipes segment in the post Covid environment; b) strong option value in its adhesive business (capable of growing at 20-25% CAGR over the next 3-5 years); c) strong growth opportunity in tanks (likely to achieve Rs1.5bn revenue by FY23) and DWC pipe (expected to post 25-30% CAGR over next 2-3 years) segments; c) expansion of manufacturing footprint (Odisha plant to commence by Oct’21) which opens up huge opportunity in East India (where its scale is currently at ~1/10th of Supreme’s revenue in East India); d) option value in the form of likely acquisition/(s) (with ASTRA likely to close FY23 with cash on books in excess of Rs10bn) and e) pre-tax RoCEs (ex-cash) likely to touch 50% by FY23.
Promoter/FII Holdings
Promoters held 55.7 per cent stake in the company as of Dec 30, 2020, while FIIs held 22.4 per cent, DIIs 7.7 per cent and public and others 14 per cent.
Astral Poly Technik Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 30497.80 Crore) operating in Plastics sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 903.60 Crore, up 20.16 % from last quarter Total Income of Rs 752.00 Crore and up 35.61 % from last year same quarter Total Income of Rs 666.30 Crore. Company reported net profit after tax of Rs 125.10 Crore in latest quarter.
Investment Rationale
The brokerage upgrades ASTRA to BUY with the stock correcting ~27% in the last one month. Besides expecting the company to continue with its strong earnings traction post Covid, it expects its premium valuations to sustain driven by a) sustained market share gain opportunity in piping segment with likely accelerated consolidation in PVC/CPVC pipes segment in the post Covid environment; b) strong option value in its adhesive business (capable of growing at 20-25% CAGR over the next 3-5 years); c) strong growth opportunity in tanks (likely to achieve Rs1.5bn revenue by FY23) and DWC pipe (expected to post 25-30% CAGR over next 2-3 years) segments; c) expansion of manufacturing footprint (Odisha plant to commence by Oct’21) which opens up huge opportunity in East India (where its scale is currently at ~1/10th of Supreme’s revenue in East India); d) option value in the form of likely acquisition/(s) (with ASTRA likely to close FY23 with cash on books in excess of Rs10bn) and e) pre-tax RoCEs (ex-cash) likely to touch 50% by FY23.
Promoter/FII Holdings
Promoters held 55.7 per cent stake in the company as of Dec 30, 2020, while FIIs held 22.4 per cent, DIIs 7.7 per cent and public and others 14 per cent.
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