Multi Baggers

Astral Poly Technik

Astral Polytechnik Ltd., promoted by the Engineer and Dalal Family, was established in 1999 to provide plumbing systems to both residential and industrial applications. Today, Astral enjoys a 70% market share in Indian PVC/CPVC pipes. Astral has an equity venture with Specialty Process LLC of USA to incorporate latest technology and quality control programs which are widely accepted at global level and to develop CPVC plumbing systems as per Indian plumbing market. It also has a technical collaboration with Lubrizol Inc. a fortune 500 company of USA to manufacture Flowguard and Corzan CPVC plumbing system for Hot and Cold water distribution as well as industrial applications. Astral maintains a strong distribution network spread across India with 250 distributors and 3000 dealers.

Astral is in process of introducing fire splinkler system to its wide range of product portfolio, it also intends to set up a maufacturing facility in Nairobi in the near future.

Key Developments:

Astral has recently launched its SWR Pipes & Fittings, ABS pipes & fittings, Foam Core pipes and is in the process of introducing Blazemaster Fire Sprinkler System in Indian Market, which will result in higher margin for the company in the future.

Q3FY10 Financials:

Sales up 51.78% y-o-y to Rs 67.81 crore. Sales increased on account of increased goods demand from the real estate sector and increase in capacity. EBITDA at Rs 10.98 crore, up 60.73% y-o-y. OPM up by 90bps to 16.2% on account of reduction in employee cost as a % to sales.

PAT is up 343.32% y-o-y to Rs 6.27 crore on account of decrease in interest expense & increase in other income. NPM increased by 608 bps to 9.25%.

Valuations:

At current price of Rs 178.95 the stock is trading at 14.33x FY09 EPS of Rs 12.63.

We recommend a “BUY” on the stock with a 12 month target price of Rs 205 with a potential upside of 13%.

* Recommended price adjusted for Bonus and Split

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