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Recommendations India

Astral Poly Technik reported Q1FY15 results update

July 22, 2014, Tuesday, 11:07 GMT | 06:07 EST | 14:37 IST | 17:07 SGT
Contributed by Nirmal Bang


Astral reported Q1FY15 numbers were in line with our expectations. Net sales for the quarter grew 25% YoY to Rs.271 crore on the back of higher volumes. EBIDTA margins de-grew by 82 bps QoQ to 14.4% due to higher advertisement costs. Adjusted PAT came in higher at 27% YoY at Rs.20 crore. Company has continuously expanded its capacity and brought in a lot of newer products in the market. The stock has moved up sharply and can get consolidated in near term; however long term outlook continues to be positive.

At CMP, the stock is trading at a P/E of 28 x and 21 x its FY15E and FY16E expected earnings respectively. We recommend investors to Hold and Buy the stock on declines with a long term perspective.


Financial Performance Q1FY15

- Revenues grew over 25% YoY to Rs.271 crore on the back of increased capacities. Volume growth stood at 23% YoY.

- EBIDTA margins grew by 191 bps YoY to 14.4%. With increased capacities set to get utilized, Management expects to maintain or improve the margins going forward.

- Unrealized loss on foreign currency borrowings stood at Rs.1.5 crore for the quarter.

- Adj PAT is up 27% YoY at Rs.20 crore.

- Kenya JV of the Company has also started picking up. Due to capacity expansion from 3000 MT to 6000 MT, in the first six months of the current year, sales have grown by 72%. Astral is planning to increase its product range in Kenya and to start manufacturing fittings in the next 12 months.

- During the Quarter, the Company has commenced expansion activity at Dholka plant.

- The current growth in momentum is expected to continue with new product launches in the BlazeMaster fire sprinkler range and conduit pipes and column pipes, solvent cement, CPVC bendable pipes, and agricultural pipes.

- BlazeMaster CPVC fire sprinkler pipes remain the focus area. Emphasis will be on spreading awareness of the product and its applications in the current year. Next year, it is likely to contribute to the topline.