with a market valuation of 39,897.91 crore, Astral Limited is a large-cap industrial firm. Astral Limited is a leading CPVC Pipes & Fittings manufacturer in India, offering a wide variety of Pipes including PVC & CPVC Pipes. Due to its backward integration capabilities for CPVC compounding (45000 MT per annum) the firm operates as a leading Indian manufacturer in the pipe sector. Astral Ltd shares are one of the most obvious examples for individuals seeking multibagger returns, as over the course of 15 years, the stock has made investors millionaires.
Astral Ltd Share Price History
Shares of Astral Limited on Friday closed at Rs. 2000 per share, up 1.07% from the previous close of Rs. 1978.85. The stock price has recorded a multibagger return and an all-time high of 35,806.64%, which has climbed from 5.57 per share at the current price level on March 23, 2007. As a result, if an investor 1 lakh investment in the shares of Astral Limited 15 years ago, it will be close at present 3.59 crores. Share price has risen over the past five years 396.18 at the current price level, as on August 18, 2017, represents a multibagger return of 404.82%.
The stock has given a multibagger return of 170.46% in the last 3 years but in the last 1 year the stock has declined by 1.99%. On a YTD basis, the stock has fallen 14.24% so far in 2022. The stock had touched a 52-week high on the NSE. 52-week low of 2,524.95 on 17-Jan-2022 and 1,581.55 as on 20-Jun-2022 which indicates that at the current price level 2,000.00 share is trading 20.79% down from 52-week high and 26.45% up from 52-week low.
Astral Ltd. Q1FY23 Results
Astral reports net profit for the quarter ended June 30, 2022 96 crore, up 28% from 75 crore in the corresponding quarter of last year. Consolidated revenue from operations for the quarter was 1,213 crore, up 73% from 701 crore in the same period last year. In the quarter ended June 30, 2022, total spending grew 81.15 per cent year-on-year to 1,098.9 crore 606.60 crore in Q1FY22. Revenue from the plumbing category jumped 73.6% to 876.1 crore 504.70 crore in the same quarter last year, and revenue from Paints and Adhesives segment grew by 71.74 per cent 336.8 crore from 196.10 crore in Q1FY22.
Should you buy Astral Ltd shares?
Commenting on the performance of Astral, Research Analysts at broking company Sharekhan have said that “Astral Limited (Astral) posted better than expected Consolidated Revenue of Rs.1213 crores, up 73% due to strong growth in Volumes (up 48.5%) and Pipes business realization (17.1% yoy) (revenue 74% yoy at Rs 900 cr) while Adhesives & Paints revenue was up 74% yoy at Rs 334 cr. OPM Inventory at 14.3% (-419bps yoy) Disappointed due to losses (~Rs 25 cr due to fall in PVC prices) and employee and launch cost (Rs 5 cr) for taps and sanitaryware. As a result, consolidated operating profit at Rs. 173 cr (34% Y-o-Y) is our In addition, it booked additional amortization (Rs 7 crore) related to its paint acquisition and foreign exchange loss (Rs 11.7 crore) related to CPVC imports, leading to a lower than expected consolidated net profit of Rs 89 crore (Year) -up 20% year-on-year).The fall in PVC prices continues after Q1FY2023 till date and is likely to move further downward in the near future and Q2FY2 023 is expected to cause an inventory loss. However, with PVC prices stabilizing in the second half of FY2023, pipe demand will pick up. Acquisition of tap manufacturing plant at an investment of Rs. There is a revenue potential of Rs 28-30 crore. 150 crores per annum and will contribute 80% in-house production.”
Astral expects to feel operating margin pressure in the pipe vertical in the near future due to continued decline in PVC prices. However, with expected stabilization of PVC prices in H2FY2023, it should benefit from revival in demand led by channel re-stocking. Further, in-house manufacturing of faucets and sanitaryware is likely to provide better operating margins for the vertical. The scale of new businesses viz. Plastic tanks, valves, paints, faucets and sanitaryware are expected to provide a sustainable growth path for the company going forward. The stock is currently trading at a P/E of 61.5x its FY2024E earnings, which we believe provides more room for its existing and new businesses owing to strong growth potential. Hence, we maintain a Buy with a revised price target of Rs. 2,300,” said research analysts at broking company Sharekhan.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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