Prabhudas Lilladher Maintains Buy Rating on Astral, Sets Target Price of Rs 1813

Astral Ltd Posts Healthy Volume Growth in Plastic Pipe Segment

Astral Ltd, a leading player in the plastics industry, reported a significant increase in volume growth of 24.2% in the plastic pipe segment, driven by strong demand and expanding market share. In the plumbing segment, the company delivered an EBITDA margin of 22.9%, with a negligible impact from inventory gain. The EBITDA per kg for the plastic pipes segment stood at Rs 41.9, a testament to the company's operational efficiency.

The company expects the benefit of higher PVC resin prices to reflect from Q1FY27 onwards, with further price increases of Rs 5-7/kg anticipated as China landing prices have already risen by Rs 3-4/kg. As a result, the volume offtake is expected to witness an uptick in the coming months. Post the commissioning of the new CPVC resin plant, Astral is expected to gain meaningful market share in CPVC pipes & fittings, with margin improvement expected to accrue from FY28 onwards.

Key Highlights of Astral Ltd's Performance

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The company maintained its double-digit volume growth guidance in the piping segment, while also expecting a 15.0% volume CAGR in its P&F business over FY26-28. The Adhesive India business reported 15.1% revenue growth in FY26, with a margin of 15.1%, and is expected to continue with double-digit revenue growth going forward. We estimate sales/EBITDA/PAT CAGR of 16.6%/20.2%/31.3% over FY26-28E.

Outlook and Recommendations

We have cut our earnings estimate for FY27/28E by 4.4%/4.0% and maintain a 'BUY' rating on Astral Ltd. The revised DCF-based target price is Rs1,813, down from Rs1,876 earlier.

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