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Systematix Research Report
Astral Ltd.’s Q2 FY22 performance (revenue/profit after tax up 54%/63% YoY; 18.3% Ebitda margin) was a mixed bag with gross margin contracting by 511 basis points QoQ to 33.2% due to a delay in price hike to gain market share.
Margins should recover in Q3 on a 12% price hike in October 2021. Revival in the housing sector, consolidation in the pipe industry and shift from poly vinyl chloride to chlorinated polyvinyl chloride due to narrowing price gaps augur well for Astral.
Raw material availability has become another challenge, especially for small players. Adhesive business is well-placed with new launches and margin expansion.
Most of the ongoing capex will be operational by Q4; a further investment is also planned considering a robust demand outlook in all its segments.
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